So, that's the plan!

Powell didn’t seem too concerned when he announced that there would be bank failures and perhaps we now know why:

Porticoes Capital will seek to take over banks closed by the Federal Deposit Insurance Corporation, the US regulator, according to an official filing. The firm’s sponsors aim to attract hundreds of millions of dollars from investors.

Get everyone into the too big to fail banks - seems like a plan:

One Bank to rule them all, One Bank to find them, One Bank to bring them all, and in the darkness bind them
(apologies to Tolkien)

1 Like

I think Powell is clear. The risk for most midsized banks is failing commercial loans from falling asset value as more employees work from home and companies need less office space.

Powell says that risk is manageable. Big banks have greater diversification and stronger capital controls. They will survive. Midsized banks may be stressed but most will manage to survive.

1 Like