The 2023 US banking crises: causes, policy responses, and lessons

This paper explores whether there are lessons to be drawn from the 2023 US banking crises which can help improve the EU framework for prudential supervision and crisis management. It examines the common features of the US banking failures, the main triggers of the crises and their subsequent dynamics, and outlines the policy responses of the US authorities. These crises are compared with other past banking crises in order to highlight commonalities and differences. As to the policy lessons, the paper underlines that: supervisory authorities should pay greater attention to the fact that the crises of banks not labelled as systemic could also have systemic implications; financial stability could be undermined by an incomplete application of the internationally agreed prudential standards; targeted revisions of the EU prudential rules could be taken into consideration, once the work at the global level is finalized; with reference to specific aspects, the degrees of flexibility in the EU system for crisis management could be widened. Finally, the paper examines the pros and cons of an increase in the level of deposit protection in the EU.