In a recent article published in The New York Times, journalist Peter Coy argues that despite initial urgency following Silicon Valley Bank's (SVB) failure in March 2023, momentum for reform has largely dissipated.
"Two years ago, the collapse of Silicon Valley Bank sounded an alarm over vulnerabilities in the banking system," Coy writes. "And briefly, it looked like a call to action: The Federal Reserve released a 102-page critique of its own failures in oversight; Congress kicked off hearings to examine banking legislation; and columnists (including this one) outlined ideas for preventing the next crisis. Yet all of that talking has led to very little."
Supervisors briefly tightened oversight, and some banks reduced reliance on uninsured deposits, Coy recounts. But Congress has passed no major legislation, and regulatory efforts — such as proposed capital and liquidity enhancements — have been delayed, scaled back, or quietly deprioritized.
The underlying issue remains, he warns, in that the US banking system continues to rely on runnable liabilities that can vanish at the first sign of stress. While the Fed reports that funding vulnerabilities have receded to "historical norms," runnable liabilities still equate to roughly 80% of GDP — on par with pre-crisis levels. Voluntary adjustments by bank executives, rather than structural safeguards, account for most of the modest risk reduction to date, Coy laments.
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