Logs show Fed's Powell in whirlwind of meetings during March banking turmoil (updated)

Credit Suisse AG

02/06/2023 19:59

(Adds details from meeting logs, paragraph 3-7)
       June 2 (Reuters) - Federal Reserve Chair Jerome Powell
held a phone call with the head of UBS Group AG  UBSG.S  in the
days before the bank was propelled by Swiss authorities to buy
smaller rival Credit Suisse, just one of the dozens of calls and
meetings Powell held from mid-March as a banking crisis
unfolded.
    Powell's monthly meeting logs for March, released by the Fed
on Friday, showed the U.S. central bank chief spoke with Ralph
Hamers, then the UBS chief executive, for 30 minutes on March
14. That was five days before UBS agreed to buy Credit Suisse in
a deal engineered by Swiss authorities to avoid more
market-shaking turmoil in global banking.
    Powell's calendar shows the abruptness with which the
banking sector problems - which have since triggered three U.S.
bank failures in addition to the UBS-Credit Suisse deal -
erupted nearly three months ago.
        The banking troubles kicked off in the second week of
March when Silicon Valley Bank was forced to attempt an
emergency capital raising that set off a record run on deposits.
The bank failed March 10 and a smaller bank, Signature Bank, was
taken over by banking regulators on March 12. A third bank,
First Republic, would fail weeks later.
  
        Powell's calendar entries in the first week of March
were a typical mix of interactions with staff, augmented by a
bevy of calls and meetings with key U.S. lawmakers sitting on
the pair of congressional committees that Powell was slated to
appear before on March 7 and 8.
  
        The tempo abruptly changed shortly after the second of
the two congressional hearings, with Powell involved in a
40-minute meeting with officials from the Treasury, Office of
the Comptroller of the Currency, Federal Deposit Insurance Corp
and a regional Federal Reserve bank on March 10, the day SVB
failed.
  
        The schedule shows Powell working two weeks straight
from that point. Meetings were scheduled through both of the
following weekends to come up with backstops to prevent the
turmoil from cascading into a system-wide crisis with wider
economic fallout. The pace was reminiscent of his schedule in
March 2020, when the onset of the coronavirus pandemic forced
the Fed onto a crisis footing.
  

 (Reporting By Dan Burns; Editing by Chizu Nomiyama)
 ((Daniel.Burns@thomsonreuters.com;))