Financial Stability Oversight Council Releases 'Nothingburger' Statement
Update (1615ET): After much anticipation of the potential for a market-moving action (deposit guarantees, backstops), FSOC has released a statement that is a total nothingburger:
Today, U.S. Secretary of the Treasury Janet L Yellen convened a meeting of the Financial Stability Oversight Council (Council) in executive session by videoconference.
During the meeting, the Council heard a presentation from staff of the Federal Reserve Bank of New York on market developments.
The Council discussed current conditions in the banking sector and noted that while some institutions have come under stress, the U.S. banking system remains sound and resilient.
The Council also discussed ongoing efforts at member agencies to monitor financial developments.
In attendance at the Council meeting by videoconference were the following members:
Janet L. Yellen, Secretary of the Treasury (Chairperson of the Council)
Jerome H. Powell, Chair, Board of Governors of the Federal Reserve System
Michael J. Hsu, Acting Comptroller of the Currency
Rohit Chopra, Director, Consumer Financial Protection Bureau
Gary Gensler, Chair, Securities and Exchange Commission
Martin Gruenberg, Chairman, Federal Deposit Insurance Corporation
Rostin Behnam, Chairman, Commodity Futures Trading Commission
Sandra L. Thompson, Director, Federal Housing Finance Agency
Todd M. Harper, Chairman, National Credit Union Administration
Thomas Workman, Independent Member with Insurance Expertise
James Martin, Acting Director, Office of Financial Research (non-voting member)
Steven Seitz, Director, Federal Insurance Office (non-voting member)
Elizabeth K. Dwyer, Superintendent of Financial Services, Rhode Island Department of Business Regulation (non-voting member)
Adrienne A. Harris, Superintendent, New York State Department of Financial Services (nonvoting member)
Melanie Lubin, Securities Commissioner, Office of the Attorney General of Maryland, Securities Division (non-voting member)
And this comes after Yellen said no industry-wide deposit guarantees and Powell raised rates... not exactly confidence-building.
We suspect markets will be 'testing' that resilience agains oon.
* * *
"Capital markets stop panicking when officials start panicking" - Michael Hartnett
Here comes the panic.
Bloomberg just reported that Treasury Secretary Janet Yellen - who was singlehandedly responsible for stoking and restarting the bank crisis on Wednesday which until that day was easing back, with her comments that nobody in charge was even talking about a uniform deposit insurance, let alone working on one - will convene the heads of top US financial regulators Friday morning for a previously unscheduled meeting of the Financial Stability Oversight Council.
The meeting will be closed to the public, the Treasury Department said in a statement. The Treasury didn’t say what time the meeting would begin, and it wasn’t immediately clear whether the council would issue a statement following the meeting.
The step comes as regulators continue efforts to instill calm in financial markets and among bank depositors following the recent failure of two mid-sized lenders in the US and the near-collapse of banking giant Credit Suisse Group AG before its government-brokered takeover by rival UBS Group AG.
FSOC’s members include the heads of the Federal Reserve, the Federal Deposit Insurance Corp. and several other regulatory agencies. It has little legal authority but serves as a coordinating forum. Here is a list of the full members:
The Council’s voting members are:
- The Secretary of the Treasury who serves as the Chairperson of the Council;
- The Chairman of the Board of Governors of the Federal Reserve System;
- The Comptroller of the Currency (OCC);
- The Director of the Bureau of Consumer Financial Protection (CFPB);
- The Chairman of the Securities and Exchange Commission (SEC);
- The Chairperson of the Federal Deposit Insurance Corporation (FDIC);
- The Chairperson of the Commodity Futures Trading Commission (CFTC);
- The Director of the Federal Housing Finance Agency (FHFA);
- The Chairman of the National Credit Union Administration (NCUA); and
- An independent member with insurance expertise who is appointed by the President and confirmed by the Senate for a six-year term.
Yesterday we asked "What is the record for shortest interval between a final rate hike and the first rate cut."
What is the record for shortest interval between a final rate hike and the first rate cut— zerohedge (@zerohedge) March 23, 2023
Are we about to discover that the answer is "just two days."
Finally, one can't help but wonder if this is the final pre-financial crisis meeting in Yellen's lifetime...