Las Vegas Reuters consumer and mid-sized banks are planning to monitor their internal processes more closely and hold more frequent discussions with regulators as the industry moves forward from weeks of turmoil, industry executives say.
After the collapse of Silicon Valley Bank and Signature Bank, industry leaders were taking stock and trying to distinguish solid institutions from troubled ones, executives said at a conference in Las Vegas.
There is optimism among bankers despite the last few weeks but they are not turning blind eye to what has happened, according to CBA CEO Lindsey Johnson, who spokeswoman for Consumer Bankers Association at the conference, which ends on Wednesday.
Johnson said that the industry association had 73 member banks that held more than $15 trillion in assets as of 2021 and that they're still taking stock of what happened.
She spoke as senior executives from regional and mid-sized U.S. banks gathered for the association's annual conference this week.
An executive from a large lender who declined to be identified because they were not authorized to speak publicly said that the recent bank collapses were isolated events and unlikely to spread.
This is very different from the 2008 crisis and is certainly not as dramatic, the executive said.
Mid-sized U.S. lenders said they are trying to hang onto customer deposits by paying better rates and tweaking some of their existing strategies after bank failures triggered a $119 billion exodus from small institutions.
Regulators also drew attention to the need to manage risks at non-banks similar to banks. Consumer Financial Protection Bureau Director Rohit Chopra said regulators were focused on maintaining the financial system's stability.
The collapse of SVB and Signature Bank, which was later bought by a subsidiary of New York Community Bancorp, shook public confidence in banks and caused unprecedented government action to shore up the sector. A broader S&P index of bank shares has fallen 14% this year.
On Tuesday, bank stocks went up for a second consecutive day, after U.S. regulators said they would backstop a deal for regional lender First Citizens BancShares to acquire failed Silicon Valley Bank.
In recent weeks, President Joe Biden, Treasury Secretary Janet Yellen and industry executives have made public statements aimed at reassuring depositors.
The banking system is pretty sound, and large and regional banks are well-capitalized, according to Jane Fraser, CEO of Citigroup Inc.
Even after the attempts to shore up confidence, Biden said on Tuesday that the banking crisis was not over yet.