How we’re protecting NYC’s deposits

Sign up to testify at the NYC Banking Commission hearing on May 25 Dear New Yorkers, Turmoil in the banking sector – kicked off by the sudden collapse of Silicon Valley Bank in March – has raised concerns about the stability of regional banks and the potential impact on deposits, retirement security funds, and public dollars. Next week, the NYC Banking Commission (on which the Comptroller is one of three members) will review applications of [28 banks]( seeking to hold deposits from city agencies. As a result of research and action by my office, the Banking Commission has strengthened its scrutiny of the soundness of their financials and their commitment to non-discrimination in lending and employment practices. In addition, for the first time at one of the Banking Commission’s designation meetings, the public will have an opportunity to testify before we vote on depository banks. [You can sign up to testify or submit written testimony ahead of the May 25 hearing here.]( [SIGN UP TO TESTIFY]( Quick action by federal and state regulators to limit the impact of the collapse of Silicon Valley Bank, Signature Bank, and First Republic Bank helped insulate New Yorkers, the City of New York, and our financial system from broader disruption. City deposits are fully collateralized, and the NYC pension fund exposure was limited to three one-hundredths of one percent (0.03%) of our $240 billion portfolio. Nonetheless, these developments remind us of the importance of strong public policy to manage financial risk. Here's how my office is taking action to protect New Yorkers, City banking deposits, and City pension investments from disruption in the banking sector: - Together with the Mayor and the Department of Finance, we announced new, stricter criteria that the Banking Commission will use to evaluate the financial soundness of banks applying to be depositories for City funds. We will be looking at capitalization ratios, uninsured deposits, and unrealized losses on assets held to maturity to assess the levels of risk exposure banks face. - As we previously [announced]( in February, the Commission will also look at the documents banks are required to submit to show they are taking steps to root out discrimination in their lending, account services and employment practices. - Our Bureau of Asset Management assessed our pension funds’ exposure to regional banks and found that we were significantly underweight in this area (i.e. the funds were less invested here than our average peer). In part for this reason, impacts on our portfolio were minimal. We are continuing to closely monitor developments in the banking sector and working closely with our asset managers to take appropriate actions. - Because Signature Bank had a large portfolio of loans to rent-stabilized multifamily buildings in NYC, we reached out to the FDIC and state regulators to ensure that when they sell those loans, they pay close attention to ensuring tenants in overleveraged buildings do not face displacement and deteriorating conditions. Commercial banks play a central in our financial system and in our communities, and it’s critical that they are held to high standards as responsible actors. As we consider banks for the opportunity to hold City dollars, we have to make sure they are equipped to manage funds responsibly and equitably. Like your bank? Hate your bank? Think that banks that hold City deposits should be held to high standards for sound financials, anti-discrimination policies, climate policies, and community obligations? [Sign up to testify next week at the first ever NYC Banking Commission public hearing.]( Thanks for making your voice heard, Brad P.S. We're also watching negotiations over the debt ceiling closely and taking prudent action to protect the pensions funds from volatility in the market. [Facebook]( [Twitter]( [Link]( [New York City Comptroller's Office]( Copyright © 2023 New York City Comptroller's Office, All rights reserved. Our mailing address is: 1 Centre Street, New York, NY 10007 Want to change how you receive these emails? You can [update your preferences]( or [unsubscribe from this list](.