Tarullo: We May See Some Regional Banks Atrophy

The video discusses the role and challenges of regional banks in the US, highlighting their importance in lending to midsize companies. It covers recent regulatory changes following bank failures and the need for strong regional banks to ensure competition. The video also examines capital requirements for large banks and their impact on financial stability. Finally, it explores monetary policy and the debate over interest rates, focusing on the concept of the natural rate of interest.

What percentage of U.S. commercial banking assets do midsize regional banks account for?

• 10%

• 20%

• 30%

• 40%

What was a significant factor leading to the failures of banks like Silicon Valley and First Republic?

• Poor customer service

• High operational costs

• Lack of customer deposits

• Unrecognized losses on bond portfolios

What is one proposed way to strengthen the regional banking system?

• Increasing the number of midsize banks

• Reducing the number of banks

• Focusing only on large banks

• Merging all regional banks

What is the main concern with the current stress tests for banks?

• They are too expensive

• They have become predictable

• They are not comprehensive

• They are too difficult

What is the optimal range for capital as a percentage of risk-weighted assets according to academic work?

• 5-6%

• 20-21%

• 10-11%

• 14-15%

What is the 'R Star' in monetary policy?

• A fixed interest rate

• A real-time data point

• The neutral real rate of interest

• A government-set rate

Why might the natural rate of interest be considered an 'invisible' in monetary policy?

• It is easily observable

• It is a theoretical concept

• It is set by the government

• It is derived from real-time data