Bank of England (BoE) Governor Andrew Bailey has asked banks to be vigilant as the current market is unfavorable, echoing President Joe Biden’s latest sentiments that the ongoing banking collapse is not anywhere near its end.
Bank of England Governor Andrew Bailey asks banks to be vigilant
Financial and political leaders are actively touching on the ongoing financial collapse. Banking stocks are nose-diving globally following a series of Bank collapses that were started by the fall of Silicon Valley bank.
Now, the BoE Chief, Andrew Bailey, has come out to tell the banks to brace themselves as the current market will not be easy. He made these comments on March 28, 2023, where he vowed to be vigilant amid the current market shake, which he termed a “testing out” to find banks’ weaknesses.
Bailey revealed to U.K.’s Treasury Select Committee that the U.S. is clearing its mess in regional banking and that Credit Suisse was an institutional issue that is not widespread in the U.K. He also added that the country’s banking system is strong and has good liquidity.
Bailey compared the U.K. and the U.S. banking systems saying that the set regulations for the treatment of interest rate risk in the banking book (IRRBB)- that refers to the prospective risks to bank capital and earnings from adverse movements in interest rates-as the main reason why the British banking system still stands while US one is on shaky ground.
President Biden says the banking crisis is not over yet
At around the same time, U.S. President Joe Biden said that the White House’s response to the banking crisis is not over. He said he believes his team has handled the crisis well but is still watching to see what happens even though they are convinced they are moving in the right direction.
Biden also explained that his administration looked at legislative changes to ensure such a crisis would never happen again. However, he expressed concerns that it may be difficult to do so as they have a split Congress. Keep watching Fintech Express for updates on macro-finance and other related developments.