Regulatory Review Urged After Silicon Valley Bank Failure

Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen have suggested that new financial regulations may be necessary to prevent future bank runs following the failures of Silicon Valley Bank and Signature Bank. Powell has criticized bank executives and conceded that Fed supervisors had not been effective at preventing the bank from sliding into insolvency. Yellen supports legislation that would penalize executives whose actions lead to bank failures and restore rules that were rolled back during the Trump administration. The Biden administration has limited legal authority to unilaterally lift the deposit insurance cap, but financial sector analysts have speculated that the Treasury Department is studying whether it could utilize its Exchange Stabilization Fund to back bank deposits.