But, of course, SVB's vulnerability came not from credit risk, but from excessive interest rate risk exposure and a business model that was vulnerable in ways its management did not fully appreciate, including a heavy reliance on uninsured deposits. These events suggest a need to strengthen our supervision and regulation of institutions of the size of SVB.
I look forward to evaluating proposals for such changes and implementing them where appropriate.2 Much will depend on getting the specifics right, and we should bear in mind that there are always tradeoffs in any financial regulation. In addition, the U.S. has benefited from its rich, multi-tiered banking ecosystem, and that diversity should be preserved.