Kashkari: 'Fundamentally, the banking system is sound'

The president of the Federal Reserve Bank of Minneapolis Neel Kashkari reinforced on Sunday that the banking system is "sound."

"The banking system is resilient, and it’s sound," Kashkari told Margaret Brennan on CBS's "Face the Nation." "The banking system has a strong capital position and a lot of liquidity and has the full support of the Federal Reserve and other regulators standing behind it. Now, I'm not saying that all of the stresses are behind us, I expect this process will take some time."

"But fundamentally, the banking system is sound," he added.

Kashkari's comments come after weeks of turmoil in the banking industry, as Signature Bank and Silicon Valley Bank collapsed earlier this month and First Republic Bank needed to be bailed out by a group of other banks. These incidents have sparked market concerns about whether a larger banking crisis is imminent.

His comments echo those of Federal Reserve Chairman Jerome Powell, who said last week that the U.S. banking system remains “sound and resilient.” 

Kashkari said the question of whether big banks are too large to fail is "now beyond doubt," saying that regional and community banks in the United States are under "enormous pressure," which needs to be addressed.

"It's an unfair playing field that's put enormous pressure on regional banks and community banks and that needs to be addressed," he said. "We need regional banks in America. We need community banks in America."

"Once we get through the stress period, we have to come up with a regulatory system that ensures the soundness of our banking system but is fair and even so that community banks and regional banks can thrive," he added.