One year on, regulators still want a cure for bank runs
Broad support for higher outflow assumptions on uninsured deposits, but that won’t save insolvent banks
When large banks fail and markets tremble, it’s natural for regulators to want to know how to prevent another crisis in the future. So it is with the crisis of 2023, which took down Silicon Valley Bank (SVB) and First Republic in the US, and Credit Suisse in Europe. But to know if regulations need changing, you first have to agree on what exactly went wrong.
The US’s acting comptroller of the currency, Michael Hsu, thinks he has an answer. Or rather, two answers, to be precise. In January this
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