National Economic Council Director Lael Brainard\u2002said on Sunday that the recent high-profile failures of three mid-sized banks were \u201cisolated problems\u201d and stressed that the banking system is \u201csound.\u201d
The environment has changed a lot over the last few years with interest rates going up by a large amount, and banks \u2014 several banks that have now failed and been taken over by healthier banks didn\u2019t manage their risks,\u201d Brainard said on CBS\u2019s \u201cFace the Nation.\u201d
\u201cThose were isolated problems. But, of course, we\u2019re all monitoring the situation very carefully. But we have the tools. We\u2019ve taken strong actions. I think people know what the playbook is,\u201d she added. Brainard was previously a top official at the Federal Reserve before President Biden named her in February to replace Brian Deese as the key White House economic adviser.
\u201cSo, no more failures?\u201d asked CBS\u2019s Margaret Brennan.
\u201cWell, in that sense, the system overall is sound. I can\u2019t speak to particular institutions, obviously. That sits with the bank regulators. But, overall, you\u2019ve seen that the banking system is sound and \u2013 and deserves continued vigilance,\u201d Brainard said.
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Silicon Valley Bank, Signature Bank, and First Republic Bank have all collapsed this year, meaning three of the four largest bank failures in U.S. history have taken place over the last two months and shaking confidence in the banking system.
Brainard on Sunday stressed that the U.S. system has nearly 5,000 banks, ranging from banks in small communities to larger institutions, \u201cthe money center banks,\u201d and said the midsize-bank failures \u201cwere dealt with in a way where depositors never had any question but that they would have access to their deposits.\u201d
\u201cSo, in that sense, Americans have confidence. The banking regulators took strong actions. We have the tools and they can be used again,\u201d Brainard said. \u201cMore broadly, though, the banking system is sound, although we are monitoring very carefully.\u201d <\/p>\n\n\n\n