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Chair Powell Acknowledges Banking System Resilience

FED
  • Q: Does Banc California's acquisition of PacWest suggest the full impact of bank failures hasn't been felt? Have we seen most of the ripple effects?
  • A: Things have settled down out there for sure. Deposits have stabilized, capital/liquidity strong, lending stable Q/Q and up significantly Y/Y, profits coming in strong this quarter. Overall the banking system remains strong and resilient. We're still watching the situation carefully.
  • Some banks may be tightening more than others; the SLOOS has been telling us for more than a year that banking conditions are tightening. Tightening conditions are restraining and will restrain economic activity. This is an expected result of tightening interest rate policy. Is is more effective this time because of what happened in March? I don't think we know that.

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