Earlier this month the U.S. Federal Reserve in a report to Congress gave what has become a standard reassurance: Banks were strong and the overall financial system in solid shape.
That confidence is now being tested as the Fed and other regulators watched the failure of Silicon Valley Bank last week rapidly morph into a potential systemic shock, threatening to undermine confidence in bank deposits and touch off more destabilizing runs.
Just days after delivering the all clear to Congress, the Fed rolled out a crisis playbook honed during the housing collapse in 2008 and expanded during the COVID-19 pandemic, announcing its latest go-big and go-fast effort to keep the financial system stable.