Press conference exchange between STEVE LIESMAN and Fed Chair Jerome Powell:

user: Mr. Chairman, can you—oh, thank you. Steve Liesman, CNBC. Can you tell us what the Federal Reserve Board did in the wake of that February presentation where you were informed that Silicon Valley Bank and other banks were experiencing interest rate risks? And can you tell me what supervisory actions you’ve done in the wake of the recent bank failures to make sure that banks are currently appropriately managing interest rate risk? And part 3, but it’s all the same question here—do, do you still think this separation principle that monetary policy and supervision can be handled with different tools? Thank you.

assistant: Sure. So the February 14 presentation—I didn’t remember it very well. But now, of course, I’ve gone back and looked at it very carefully. I did remember it. And what it a general presentation. It was an informational briefing of the whole Board— the entire Board. I think all members were there. And it was about interest rate risk in the banks and, and lots of data. And there was one page on Silicon Valley Bank, which talked about, you know, the amount of losses they—or mark-to-market losses they had in their portfolio. There was nothing in it about—that I recall, anyway, about, about the risk of a bank run. So it was—I think the takeaway was, they were going away to do a—an assessment, a vertical—sorry, horizontal assessment of, of banks. It wasn’t—it, it wasn’t presented as an urgent or alarming situation. It was presented as a—as an informational, nondecisional a thing. And I thought it was a good presentation and, and, as I said, did remember it. In terms of what we’re doing—of course, I think banks themselves are, are—many, many banks are now, are attending to liquidity and taking opportunity now, really, since, since the events of, of early March, to build liquidity. And you asked about the separation principle. I— you know, like so many things, it, it’s very useful. But, you know, ultimately, it has its limits. I mean, I, I think in this particular case, we have found that the monetary policy tools and the financial stability tools are not in conflict. They’re both—they’re working well together. We’ve used our, our financial stability tools to support banks through our lending facilities. And, at the same time, we’ve been able to use our monetary policy tools to foster maximum employment and price stability.

user: Mr. Chairman, I’m sorry. I don’t mean to be argumentative, but the, the staff report said, “SVB... has significant interest rate risk.” It said, “Interest rate risk measurements... failed” at SVB. And it said, “Banks with large unrealized losses face significant safety and soundness risks.” Why was that not alarming?

assistant: Well, I mean, I didn’t say it wasn’t alarming. It was—they’re pointing out something that they’re working on and that they’re on the case—that, that, you know, that—I’m not sure whether they mentioned—I think they did, actually. They mentioned that they had taken regulatory action matter—or supervisory action in the form of matters requiring attention. So I think that was also in the presentation. I think it was to say: Yes, this is a bank, and there are many other banks that are experiencing this—these things, and we’re on the case.