Minister of Finance Janet Yellen held a closed-door meeting with top financial regulators on Friday morning amid renewed concerns about the global banking system.
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The meeting, hosted by the Financial Stability Oversight Board, was closed to the public, the Finance Ministry said in a statement. The meeting was scheduled in advance.
Created in 2010 under the Dodd-Frank Act, the FSOC is led by the Department of the Treasury and includes Federal Reserve, FDIC, Securities and Exchange Commission and other regulatory bodies. The Board meets regularly to discuss the state of financial stability and regulation.
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Yellen says US will take additional steps to protect small banks if needed
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Regulators rushed to contain the fallout from the stunning collapse of Silicon Valley Bank and Signature Bank earlier in March, including protecting all deposits at the two institutions — even those holding funds in excess of the FDIC. The insurance limit is $250,000. The Fed also launched a new emergency bailout for lenders to help them withdraw deposits on favorable terms.
The moves were intended to stem the flow of funds from small and regional US lenders as customers flocked to banks deemed too big to fail.
However, banks are still feeling the effects of the industry turmoil.
FUND MANAGERS FEAR THAT SYSTEMIC LOAN MAY CRUSH US MARKETS
A fresh sell-off in banking services swept the markets on Friday morning as shares of Deutsche Bank tumbled, rekindling fears of a wider financial crisis.
Shares of the German lender fell almost 10% in trading on the German stock exchange.
The fall followed a sharp rise in the value of financial derivatives known as credit default swaps, which insure bondholders against a bank defaulting on their debts.
Rising debt insurance costs also came as a prelude to a government-backed takeover of Swiss lender Credit Suisse by rival UBS.
