Citi Chief Jane Fraser Confident About US Banking System: 'This Is Not A Credit Crisis'

Citigroup Inc C CEO Jane Fraser expressed confidence in the U.S. banking system despite a series of bank failures that shook investors and sparked turmoil across global financial markets.

The banking sector is “pretty sound,” despite high-profile bank closures, Fraser told the Economic Club of Washington D.C., according to a Reuters report. “This is not a credit crisis,” she stated.

Also Read: How To Invest In Startups

Fraser's comments come at a time when the Federal Reserve explicitly stated in its policy comments that recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation.

"The extent of these effects is uncertain. The Committee remains highly attentive to inflation risks," the central bank stated.

Fraser also said Citi is not interested in buying First Republic Bank FRC while mentioning that the lender was one of 11 major banks to contribute a cumulative $30 billion in deposits to First Republic last week.

Shares of First Republic Bank closed 15.47% lower on Wednesday after Treasury Secretary Janet Yellen said the FDIC was not considering providing “blanket insurance” for banking deposits.

The company's tangible book value is currently far underwater, leaving a capital gap of up to $13.5 billion, according to Bloomberg, which cited Wedbush analysts.

Money Movement: Fraser also pointed out that mobile apps and consumers' ability to shift millions of dollars with a few clicks reflect a great change in how bankers manage and regulators respond to the risk of bank runs, according to a Bloomberg report.

"There were a couple of Tweets and then this thing went down much faster than has happened in history. And frankly, I think the regulators did a good job in responding very quickly because normally you have longer to respond to this," Fraser said according to the report.

Read Next: Elon Musk Says ‘Foolish’ Fed Rate Hike Will ‘Worsen Depositor Flight’

Photo by WEF on Flickr