San Francisco Fed chief Mary Daly said the U.S. banking system is "safe and sound," but she did not offer fresh details on the failure of Silicon...
San Francisco Federal Reserve President Mary Daly said the central bank will use all its tools to keep country’s financial system “safe and sound,” but she did not offer any fresh details on Silicon Valley Bank in her first public remarks since its failure.
SVB was located in the San Francisco Fed’s region and the bank was responsible for regulatory oversight. Daly and the San Francisco Fed have been criticized for not spotting the potential problems earlier. The main Fed has ultimate authority on how to regulate financial institutions like SVB. Regional bank presidents have a lesser role.
“How much credit tightening will ultimately occur is not yet known,” Daly said. “What we do know is that tighter credit conditions translate into less spending and investment by households and businesses, resulting in a slower pace of economic growth.” Given all these restraints, Daly said the Fed has to continue to monitor the economy closely before determining how much further to raise interest rates.
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