The U.S. banking sector doesn’t have “a contagion problem,” says The Carlyle Group Co-Founder David Rubenstein. In a conversation with Yahoo Finance’s Brian Sozzi, the executive shared his thoughts on March’s banking sector meltdown. Rubenstein says that overall, the U.S. Government did a “reasonably good job” with their response. Still, it’s possible authorities could’ve “more closely monitoring Silicon Valley Bank.” The Federal Reserve, Rubenstein says, has the ability to go in to smaller banks like SVB and require them to put in more capital, noting that the board in San Francisco "probably should've been more on top of it."
He also offered his outlook on the potential purchase of First Republic Bank (FRC), saying he suspects the government will “provide some assistance” to address the “big hole in the balance sheet,” if anyone is going to buy the regional institution. The banking issues boiled down to the simple truth that some smaller institutions were "growing a little too rapidly."
Key Video Moments:
00:00:28 - Federal gov't did "reasonably good job" in banking response
00:01:13 - "We don't have a contagion problem" in banking
00:01:31 - Government will have to step in if they want First Republic purchase to happen
00:02:18 - Biggest banks are well capitalized, "we don't have the problem we had in '07, '08"
