Ultimately, it’s very high leverage,” Tomasz Piskorski, a finance professor at Columbia Business School, tells me. Even a year after that exact thing happened — Silicon Valley Bank failed after depositor demand eclipsed the value of its assets — regulators haven’t addressed the core leverage issue. The most obvious answer is one the banking industry hates: Increase the amount of money a bank is required to hold in reserve. And their go-to argument against such regulations is that they force banks to curtail loans to customers, hurting folks in the real economy. The upshot: Despite the banking industry’s protest, banks can handle much higher capital requirements (at least, according to Piskorski et al).

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Persons: CNN Business ’, it’s, ” Tomasz Piskorski, there’s, Piskorski, haven’t, Jerome Powell, ” Piskorski Organizations: CNN Business, New York CNN, New York Community Bank, Columbia Business School, Valley Bank, Federal Reserve, National Bureau of Economic Research Locations: New York, Basel, stow, “