Navigating the Future of Banking Amidst Recent Failures.

Mismanagement of interest rate risk and reliance on uninsured deposits were at the core of recent bank failures. Regulators historically address interest rate risk through supervision, but there are potential policy changes to encourage banks to better manage it. Deposit insurance systems aim to balance reducing the risk of runs with promoting market discipline. Policymakers should evaluate any potential policy changes thoughtfully and remain mindful of how they impact the majority of banks in the majority of times.