Citigroup CEO: ‘The banking system is pretty sound’

Citigroup CEO Jane Fraser
Greg Nash
Citigroup CEO Jane Fraser answers questions during a House Financial Services Committee oversight hearing of the largest U.S. banks on Wednesday, September 21, 2022.

Citigroup CEO Jane Fraser said Wednesday evening that recent bank failures aren’t a sign of broader trouble in the financial system.

Her remarks come after Silicon Valley Bank, Signature Bank and Credit Suisse collapsed. Some fear that San Francisco-based First Republic Bank could be the next to fall.  

“The banking system is pretty sound,” Fraser said during an event hosted by the Economic Club of Washington, D.C. “This is not a credit crisis. This is a situation where it’s a few banks that have some problems, and it’s better to make sure that we nip that in the bud.”

Fraser said that the banks that went under had “a lot of issues.” She pushed back on the idea that the Federal Reserve’s rate hikes — which caused Silicon Valley Bank’s long-term investments to plummet in value — pose a major threat to banks. 

“There are an isolated few that have really been impacted very negatively that didn’t necessarily manage their balance sheets that well, in retrospect,” Fraser said.

Her comments echo those of Federal Reserve Chairman Jerome Powell, who said Wednesday that Silicon Valley Bank management “failed badly” and expressed confidence that the banking system remains on solid footing.  

Citi was one of several big banks to give $5 billion in deposits to First Republic Bank, which suffered a massive outflow of deposits following the run on Silicon Valley Bank. The bank is still looking to raise money to stay afloat.

Fraser said a few more smaller banks could experience trouble, but their problems should be manageable. A “mild recession” is more likely than before, Fraser said, adding that the U.S. economy could “pull out of it pretty quickly.”

Fraser noted that she frequently speaks with Powell and Treasury Secretary Janet Yellen, who in recent weeks took action to protect depositors at failed banks and boost the Fed’s lending to banks.

“They’re soliciting advice, trying to understand what’s happening in the economy, what are we seeing, what are we learning,” Fraser said.

Tags bank run Citigroup Credit Suisse financial system Janet Yellen Jerome Powell Signature Bank Silicon Valley Bank

Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

See all Hill.TV See all Video

Most Popular

Load more


See all Video