Treasury Secretary Janet Yellen said she’s encouraged by the quarterly earnings of large banks in the US so far, but is waiting to see how regional lenders — which occupied the center of a near-crisis in March — have fared.
(Bloomberg) — Treasury Secretary Janet Yellen said she’s encouraged by the quarterly earnings of large banks in the US so far, but is waiting to see how regional lenders — which occupied the center of a near-crisis in March — have fared.
“The ones that I’ve seen have been pretty solid, and suggest that the banking industry — certainly the bigger banks that have been announced — seem to be benefiting in some ways from higher interest margins,” she told reporters while on a visit to Vietnam.
The KBW Bank Index has risen nearly 10% so far this month, compared with 2.6% for the S&P 500, as some of the largest US lenders, including JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co., reported strong results for the second quarter.
Yellen noted, however, that many mid-sized banks had yet to release their results.
“We’ll have to see what happens with regional banks, which could be more adversely affected,” she said.
The collapse of Silicon Valley Bank and two other mid-sized lenders earlier this year, largely due to unhedged exposure to interest rates, sent tremors through financial markets and threatened to trigger bank runs at other regional lenders across the US.
Regulators stepped in to guarantee uninsured deposits at the failed institutions and launched an emergency lending program for all banks at the Federal Reserve.
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