Tom Honig

All about bank(panic)s and the implications for policy

Daniel Tarullo, Thomas Hoenig, Gary Gorton, Allison Nathan, Dan Tarullo, Tom Honig

Former Federal Reserve officials and economists Dan Tarullo, Tom Honig, and Gary Gorton analyze the Silicon Valley Bank collapse as a result of management failures, rapid interest rate hikes, and regulatory gaps created by the 2018 S-2155 rollback. These experts diverge on primary causes but converge on solutions requiring mandatory multi-scenario stress tests, higher leverage ratios, and expanded deposit insurance to address the systemic fragility of uninsured short-term debt. Their assessment warns that without these structural reforms, the mid-sized banking sector remains vulnerable to future crises driven by digital runs and the inability to absorb unexpected economic shocks.