investigation. the fed doesn t just get to investigate itself. i want to see us make a change in the laws, roll back the rollbacks to put tougher regulations in place. these bank ceos, we ve got to align them so that there are clawbacks, they re giving up on these big salaries and don t get to go into banking again if they explode a bank. nbc business and data reporter brian cheung joins me now. you ve got new york bank, signature bank. if i ve got money in one of those banks, what happens now? signature was the one that went under and failed about two weekends ago. all the customers of signature bank as of today will now be customer of flagstar bank. it s a subsidiary of new york community bank corp. basically just different names, but you re now essentially a flagstar customer. this is interesting because the fdic, the government stepped in and said this is a bank that
bank down 26% on the day. the latest is that the wall street journal is reporting that jpmorgan s ceo jamie dimon and other ceos are in talks about another potential rescue for first republic bank and the journal says the talks are preliminary and none of the banks are commenting yet but we should stay tuned for that. is this going to change, any of this, the fed s approach? reporter: well, that is definitely a huge question right now. what is the fed going to do? investors don t know what the fed is going to do. even though the decision is coming in just 48 hours, about a one in three chance the fed doesn t do anything at all because they re worried about the banking system. two in three chance they raise rates anyway to try to get inflation under control by raising them by a quarter of a point. here s why all of this really matters. it s because the more nervous bankers are, the more difficult it s going to be and more expensive to borrow for
through the whole banking system. this time around has alluded to individual banks with their own weaknesses subject to deposit series pulling out funds. we are in a fundamentally changing economy. we have had not just the financial crisis but before that low rates for a long time. since the financial crisis we ve had even easier money, lots of money poured into the system by the central banks and in the last year or two that s been changing so those rising rates really kind of it s like what warren buffett says when the tide pulls out you see who is swimming without their shorts on. it starts to expose risk. who doesn t have enough lshg? who is holding too much debt? so it s not about the banking sector alone. it s about who is going to be vulnerable as interest rates rise and that could be companies, it could be consumers, entire countries so i look at this and i say, you
trying to do for years, and i hope we can find a way to do it because we don t want a spring break in our city. how do you do that? you mentioned having limited tools in your toolbox. other than locking down the city, maybe going for a preemptive curfew, it sounds like maybe that is something you re considering. what else do you do? i think the preemptive actions are the only way to project out to the community that might want to participate in the spring break that they might not want to come here because it s not going to be the good time they re hoping for. you know, they know there are police everywhere but that doesn t seem to bother anyone and most of the people aren t here to break the law. i don t want to make it sound like tens of thousands come here to break the law. the problem is when you have tens of thousands of young people all crowded together looking to participate in a rite of passage, you know, how many have to sort of go beyond the pale of conduct or to criminal
discipline now we re going to have to rely much more on regulatory discipline. and that places real responsibilities on the regulators one quick question. goldman sachs economist is already saying this means that the fed can t raise rates again because higher interest rates were the cause of the problem. should the fed pull back on its inflation fight? this is one of those weeks where we re going to learn a lot and the fed doesn t have to make that decision for another week i certainly hope that this is not going to change monetary policy from the non-inflationary path that it needs to be on. this may mean some tightening of credit conditions sort of like tighter monetary policy generates. it s obviously appropriate for the fed to take account of that,