Fed Wants Regional Banks to Shore Up Liquidity

US regulators are demanding regional banks improve liquidity following recent bank failures. The Federal Reserve is issuing warnings to banks like Citizens and M&T, focusing on those with assets between $100 and $250 billion. This comes amid increased scrutiny on banks' funding and liquidity after the Silicon Valley Bank collapse. Regulators are ensuring banks have adequate liquidity planning and access to the Fed discount window. Persistent concerns from the banking crisis remain, with banks facing potential costly measures. Category four banks, previously exempt from recognizing unrealized losses, are now under scrutiny to prevent future crises.

What is the primary reason for the increased scrutiny on regional banks by US regulators?

• To increase bank profits

• To ensure banks have adequate liquidity

• To reduce the number of bank branches

• To promote international banking

Which banks are being closely monitored due to their asset size?

• Banks with assets between $250 and $500 billion

• Banks with assets under $50 billion

• Banks with assets between $100 and $250 billion

• Banks with assets over $500 billion

What did the Federal Reserve find in its review after the Silicon Valley Bank collapse?

• Lack of technological advancement

• Excessive profits

• Overstaffing issues

• Shortcomings in supervisory actions

What could happen if banks fail to address regulatory warnings in a timely manner?

• They could increase interest rates

• They could expand internationally

• They could face monetary penalties

• They could receive awards

What was the impact of the 2018 legislation on certain banks?

• It mandated banks to open more branches

• It allowed banks to reduce staff

• It exempted banks from recognizing unrealized losses

• It required banks to increase their interest rates