Banks Will Likely Consolidate Further Into Bigger Giants: Fed's Yellen
US Treasury Secretary Janet Yellen has weighed in as more banks close shop amid the ongoing banking crisis.
The severe winter that hit the banking industry has sent many banks packing while those still standing battle liquidation issues and crashing stock prices.
During a discussion with finance executives at a meeting hosted by the Bank Policy Institute (BPI), Yellen said more bank mergers might occur amid the turmoil.
A press release by the US Treasury Department noted that Janet Yellen met with over two dozen CEOs and executives to discuss President Biden’s economic agenda and the economy.
During the meeting, Secretary Yellen reaffirmed the integrity of the US banking system, saying that it is still well-capitalized with strong liquidity.
Yellen commended the actions of federal regulators and the President’s administration during the peak of the crisis in March.
The secretary noted that their decisive action to protect depositors strengthened public confidence in the banking system and reduced financial contagion.
Yellen's statements project a super strong banking system. However, citing sources familiar with the matter, CNN Business reported that the Treasury Secretary highlighted the possibility of more bank mergers during the discussion.
According to CNN Business, Yellen told the meeting participants that more banks would likely merge into bigger ones if the banking crisis drags on.
Yellen’s statements come after JPMorgan acquired First Republic Bank (FRB) in April following its collapse and seizure by the US government.
The United States’ largest bank, JPMorgan Chase, acquired FRB’s $173 billion worth of loans, $30 billion in securities, and $192 billion in insured and uninsured deposits.
In a press release JPMorgan’s
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