Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, has said it is too early to declare that there are no risks to the banking sector following the collapse of Silicon Valley Bank (SVB) and regional lender Signature Bank last month, but that there are “hopeful” signs the turmoil may be over.
“I’m not ready to declare all clear, but there are hopeful signs that these risks are now better understood and calm is being restored,” Kashkari said on April 11 during a town hall event at Montana State University in Bozeman.
While speaking about the collapse of SVB specifically, Kashkari noted that the bank held a large number of deposits that were invested in Treasury bonds, which are highly sensitive to interest rates, as well as a significant number of deposits that were uninsured beyond the Federal Deposit Insurance Corp.’s deposit insurance amount of $250,000….