Fed's Powell: There were 'risk-management breakdowns' at banks

1 minute
Fed's Powell: There were 'risk-management breakdowns' at banks

Jerome Powell said the Federal Reserve Chairman is examining the Archegos Capital ManagementArchegos Capital Management blowup because it revealed risk management failure at a number of banks his agency supervises.

'It seems that there are risk management breakdowns at some companies - not all of them - and that is what we're looking at, Powell said at a press conference Wednesday.He also defended the role of the Fed as industry supervisor, saying his examiners aren't responsible for taking control of losses by lenders to stem losses.'We don't manage their companies for them, he said.

The collapse of trader Bill Hwang's company continues to reveal the losses of some of the world's largest lenders and cost some executive their jobs.More than $10 billion in losses at major banks including Morgan Stanley and UBS Group AG sent shock waves through the industry and has drawn attention from U.S. regulators.

The Archegos borrowings weren't very clear in some banks, Powell said, adding that it's troubling' in an aspect of banking that is supposed to carry well defined risks.

While, while that revealed a failure of bank controls, "Archegos risks" were not systemically important or not so big as they would have created problems for any of those institutions, he told reporters.

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