Five Ways to Stop Banks From Failing
When banks collapse, the question always arises: Where were the supervisors? Time and again — at Silicon Valley Bank, at Credit Suisse, ahead of the 2008 subprime mortgage crisis — they’ve failed in their responsibility to ensure the safety and soundness of both individual institutions and the broader financial system.
Banks must produce living wills detailing how they could be wound down if they failed — without, of course, knowing in advance which among myriad possible events might be the cause of said failure. As a result, the documents go on for thousands of pages, which no one can possibly internalize and which are unlikely to be of much use in an actual crisis.
Supervisors and bankers must communicate better.
Bill Dudley Bloomberg December 22, 2025
Big Banks Are Supposed to Fail Without Causing Panics. Is That Even Possible? - Living wills
https://englundmacro.blogspot.com/2023/08/big-banks-are-supposed-to-fail-without.html
How to Make Banks Less Safe deposit insurance moral hazard
https://englundmacro.blogspot.com/2025/10/how-to-make-banks-less-safe-deposit.html
GSIBs; Globally systemically important banks
https://englundmacro.blogspot.com/2025/03/gsibs-globally-systemically-important.html
“Bank stress tests are fun. They are interesting. So is a game of Monopoly. Do not mistake either for reality,”
https://englundmacro.blogspot.com/2024/06/bank-stress-tests-are-fun-they-are.html
Kommentarer