2023-07-20 16:09:00
Treasury Secretary Janet Yellen said she is encouraged by the quarterly results reported by large banks in the United States so far, but is waiting to see how the regional banks, which were at the center of what was a near-crisis in March, fare.
“The ones I’ve seen have been pretty strong and suggest that the banking industry —certainly the largest banks ever announced— seems to be benefiting somehow from higher interest margins,” he told reporters during a visit to Vietnam.
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The KBW Bank Index is up nearly 10% so far this month, compared with 2.6% for the S&P 500, as some of the biggest US banks including JPMorgan Chase & Co., Citigroup Inc and Wells Fargo & Co., have reported strong second-quarter results.
However, Yellen noted that many midsize banks had yet to publish their results.
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“We will have to see what happens with the regional banks, which might be more affected”said.
The collapse this year of Silicon Valley Bank and two other midsize banks, largely due to unhedged interest rate exposure, rattled financial markets and threatened to trigger runs on other regional US banks.
Regulators stepped in to guarantee uninsured deposits at failing institutions and launched an emergency lending program for all banks at the Federal Reserve.
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