Friday Meeting with US Regulators Amid Banking Turmoil!

Treasury Secretary Janet Yellen Convenes Emergency Meeting

by Eddie Tiernan
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Fox Business / Drew Angerer/Getty Images

Concerns over the stability of the international banking system prompted Treasury Secretary Janet Yellen to convene an emergency meeting of leading financial authorities on Friday morning.

The Treasury Department said in a statement that the public was not invited to attend the meeting of the Financial Stability Oversight Council as the meeting had been planned in advance.

The Dodd-Frank Act of 2010 established the Financial Stability Oversight Council (FSOC), which is chaired by the Treasury and comprises the leaders of the Federal Reserve, the FDIC, the Securities and Exchange Commission, and other regulatory agencies. This council gets together frequently to talk about how things are doing with financial regulation and stability. After the shocking collapse of Silicon Valley Bank and Signature Bank in early March 2023, authorities moved quickly to control the consequences, preserving all deposits at the two banks, including those holding sums in excess of the FDIC’s $250,000 insurance limit. The Federal Reserve has also introduced a new emergency buffer to enable financial institutions fulfill withdrawals from deposits on favorable conditions.

The measures were taken to prevent clients from fleeing to the “too big to fail” banks at the expense of smaller, regional banks in the United States.

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Nonetheless, the banking sector is still reeling from the effects of the recent instability.

Shares of Deutsche Bank dropped on Friday morning, sparking new concerns about a global financial disaster.

The German stock exchange saw an almost 10% drop in shares of the German bank.

This decline comes after bondholders saw a sharp increase in the price of credit default swaps, which are financial contracts that protect against the risk of a bank defaulting on its debts.

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