Minutes of the Financial Stability Oversight Council

March 12, 2023

PRESENT: 

Janet L. Yellen, Secretary of the Treasury and Chairperson of the Financial Stability Oversight 

Council (Council)

Jerome H. Powell, Chair, Board of Governors of the Federal Reserve System (Federal Reserve)

Martin Gruenberg, Chairman, Federal Deposit Insurance Corporation (FDIC)

Gary Gensler, Chair, Securities and Exchange Commission (SEC) 

Rostin Behnam, Chairman, Commodity Futures Trading Commission (CFTC)

Rohit Chopra, Director, Consumer Financial Protection Bureau (CFPB)

Michael J. Hsu, Acting Comptroller of the Currency, Office of the Comptroller of the Currency 

(OCC) 

Todd M. Harper, Chairman, National Credit Union Administration (NCUA)

James Martin, Acting Director, Office of Financial Research (OFR), Department of the Treasury 

(non-voting member)

Steven Seitz, Director, Federal Insurance Office (FIO), Department of the Treasury (non-voting 

member)

Adrienne Harris, Superintendent, New York Department of Financial Services (non-voting 

member) 

GUESTS: 

Department of the Treasury (Treasury)

Wally Adeyemo, Deputy Secretary of the Treasury

Didem Nisanci, Chief of Staff

Josh Frost, Assistant Secretary for Financial Markets

Graham Steele, Assistant Secretary for Financial Institutions

Sandra Lee, Deputy Assistant Secretary for the Council

Laurie Schaffer, Principal Deputy General Counsel

Eric Froman, Assistant General Counsel (Banking and Finance)

Sean Hoskins, Director of Policy, Office of the Financial Stability Oversight Council 

Alyssa O’Connor, Senior Advisor to the General Counsel

Board of Governors of the Federal Reserve System

Michael Barr, Vice Chair for Supervision

Federal Deposit Insurance Corporation

James McGraw, Senior Deputy Director, Division of Complex Institution Supervision and 

Resolution

Securities and Exchange Commission

Amanda Fischer, Chief of Staff
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Commodity Futures Trading Commission

David Gillers, Chief of Staff

Consumer Financial Protection Bureau

Gregg Gelzinis, Advisor to the Director

Federal Housing Finance Agency

Naa Awaa Tagoe, Deputy Director, Division of Housing Mission and Goals

Comptroller of the Currency

Jay Gallagher, Senior Deputy Comptroller for Supervision Risk and Analysis

National Credit Union Administration

Catherine Galicia, Chief of Staff

Federal Reserve Bank of New York

John Williams, President

Richard Crump, Financial Research Advisor, Macrofinance Studies

Office of Financial Research

Sriram Rajan, Associate Director, Research and Analysis Center

New York Department of Financial Services

Karen Lawson, Executive Vice President for Policy and Supervision, Conference of State Bank 

Supervisors

Maryland Office of the Attorney General, Securities Division

Vincente Martinez, General Counsel, North American Securities Administrators Association

PRESENTERS:

Update on Market Developments

• Michael Kiley, Deputy Director, Division of Financial Stability, Federal Reserve 

• Laurie Schaffer, Principal Deputy General Counsel, Treasury

• Charles Gray, Deputy General Counsel, Federal Reserve (available for questions)

• Ryan Tetrick, Deputy Director, Resolution Readiness, Division of Complex Institution 

Supervision and Regulation, FDIC (available for questions)

Executive Session

The Chairperson called the executive session of the meeting of the Council to order at 

approximately 7:30 P.M. The Council convened by videoconference. The Chairperson began by 

outlining the meeting agenda, which had previously been distributed to the members. The 

agenda for the executive session was an update on developments in the banking sector and recent 

actions taken by the FDIC, Federal Reserve, and Treasury.
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1. Update on Market Developments

The Chairperson noted that she had convened this meeting so that Council members could share 

information regarding the latest developments in the banking sector and recent actions taken by 

the FDIC, Federal Reserve, and Treasury. She noted that regulators had convened on the 

morning of March 10 after the FDIC placed Silicon Valley Bank (SVB) into receivership. She 

stated that regulators had considered possible options on March 11 and 12 and that Treasury, the 

Federal Reserve, and the FDIC had issued a joint statement shortly before the Council meeting 

regarding actions designed to stabilize the financial system and protect depositors. She called on 

Martin Gruenberg, Chairman of the FDIC, to provide an update on these actions. 

Chairman Gruenberg stated that while SVB had experienced difficulties over time, the events 

that precipitated its failure had developed very quickly, forcing the FDIC to move rapidly to put 

it into receivership. He said that while the events at SVB alone might not have warranted the 

government’s response, the potential for a contagion effect created a vulnerability. He said that 

the combination of events at SVB and Signature Bank, which had also failed, had led to the 

conclusion there was a meaningful contagion effect that had the potential to impact additional

institutions and warranted extraordinary intervention. He said that the leadership of the FDIC, 

Treasury, and Federal Reserve had arrived at this conclusion collectively. He noted that the 

Treasury Secretary, after receiving unanimous recommendations from the boards of the FDIC 

and the Federal Reserve, and after consulting with the President, had approved a systemic risk 

exception, which enabled the FDIC to provide support to both insured and uninsured depositors

of SVB and Signature Bank. He said that regulators would continue focusing on these efforts 

and monitoring the situation during the coming days.

The Chairperson then turned to Jerome Powell, Chair of the Federal Reserve. Chair Powell 

stated that over 90 percent of deposits at SVB were uninsured, and he noted that similar firms 

had started to experience runs. He said that the Federal Reserve supported the measures 

described by Chairman Gruenberg. He stated that the Federal Reserve had publicly announced 

on March 12 that it would make available additional funding to eligible depository institutions, 

through the Federal Reserve’s Bank Term Funding Program (BTFP).

Chair Powell then turned to Michael Kiley, Deputy Director of the Division of Financial 

Stability at the Federal Reserve. Mr. Kiley described the BTFP in more detail. He said that the 

BTFP complements the systemic risk exception, which had been recommended by the boards of 

the Federal Reserve and FDIC and approved by the Treasury Secretary, that enabled the FDIC to 

complete its resolution of SVB and Signature Bank in a manner that fully protected all 

depositors, insured and uninsured. He said that the BTFP had been approved by the Federal 

Reserve and the Treasury Secretary, and he noted it would further relieve the pressure that banks 

may experience if a bank run dynamic begins to develop, by limiting the incentive for deposit 

withdrawals. 

Mr. Kiley said that the BTFP expands the backstop liquidity available to eligible depository 

institutions through the Federal Reserve’s discount window. He said the BTFP would provide

funding to banks that pledge U.S. Treasury securities and other high-quality securities, including 

agency securities and agency mortgage-backed securities. He said that loans could be made up 
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to the par value of the securities pledged as collateral rather than their market value. He said the 

BTFP would expand available liquidity in cases where increases in interest rates have caused the 

market values of securities to decline. He said that Treasury had provided $25 billion to support 

the facility. He said that the BTFP would make loans for a maturity of up to one year, longer 

than the standard Federal Reserve discount window terms.

The Chairperson then introduced Laurie Schaffer, Principal Deputy General Counsel at Treasury, 

for the next update. Ms. Schaffer described actions that Treasury had taken in connection with

the actions described above. She said that the Treasury Secretary had approved the systemic risk 

exceptions for SVB and Signature Bank after determining that least-cost resolution of the two 

institutions would have serious adverse effects on economic conditions or financial stability. She 

said that, pursuant to statute, the Chairperson would notify Congress of this determination. She 

said that the Chairperson also consented to the creation of the BTFP.

The Chairperson stated that it would be essential for Council members to maintain open lines of 

communication. She asked that staff from all member agencies closely monitor developments in 

financial institutions and markets and confer on an as-needed basis. 

Members of the Council then asked questions and had a discussion about events related to SVB 

and Signature Bank, including member agencies’ ongoing efforts to monitor market stability and 

potential contagion effects, and to protect against market misconduct; actions taken by depositors 

at SVB, Signature Bank and other regional banks; efforts by member agencies to monitor the 

impact on smaller banks, credit unions, and the Federal Home Loan Banks; and the potential 

need for an assessment of the regulatory structure to mitigate risks to the financial system. 

The Chairperson adjourned the meeting at approximately 7:57 P.M.