Regulators should have been focusing on the signs of looming failure in the traditional banking system instead of blocking decentralized financial platforms, Cathie Wood said.
“Asset and liability duration mismatches” combined with falling deposits in the banking system had been pointing to the potential crisis that was in plain sight, the ARK Investment Management chief said Tuesday night on Twitter.
Regulators have been racing to contain jitters in the financial system after the collapse of Silvergate Capital Corp. and SVB Financial Group. On Sunday, the Federal Reserve created a new lending program for banks in response to the turmoil.
While the US banking system was seizing up in response to bank runs threatening regional banks, Bitcoin, Ethereum, and other crypto networks didn’t skip a beat. Instability in the banking system threatened stablecoins, the on-ramps to DeFi, in stark contrast to regulator rhetoric https://t.co/r5xwC96Pdj
— Cathie Wood (@CathieDWood) March 15, 2023
Instead of blocking decentralized, transparent, auditable and well-functioning financial platforms with no central points of failure, regulators should have been focused on the centralized and opaque points of failure looming in the traditional banking system.
— Cathie Wood (@CathieDWood) March 15, 2023
They should have been all over the crisis that was looming in plain sight: asset and liability duration mismatches as short rates soared 19-fold in less than a year and deposits in the banking system were falling on a year-over-year basis for the first time since the 1920s!
— Cathie Wood (@CathieDWood) March 15, 2023