Upon Further Analysis — Archives
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Asking Questions Later
Regulators often follow bank failures with internal or external reviews to see what went wrong and to learn from those mistakes. A new post-mortem of the Federal Reserve’s role in the Silicon Valley Bank failure is running way behind schedule. Perhaps more significantly, the Federal Reserve has already implemented substantial changes to bank supervision well…
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The Interdependence of Risks
Recent regulatory initiatives, including proposed changes to the CAMELS ratings for banks, treat risk stripes as separate and independent from one another. In practice, however, a bank’s risks, both financial and nonfinancial, are often interdependent. The CAMELS Proposal A recent proposal to change the CAMELS rating system for banks itself reads like a game of…