Over the past year, the COVID event presented remarkable challenges for households, businesses, and the economy.
The Federal Reserve and supervised institutions took swift action to respond to these unprecedented times. The Federal Reserve made temporary adjustments to its regulations and supervisory programs to help the banking industry meet the needs of customers and communities. Banking organizations played a critical role in supporting their customers and the broader economy. Among other actions, banking organizations have waived fees and restructured loans to ease financial burdens, continued to lend to households and businesses, and took steps to maintain safe and sound operations.
However, the economic recovery is not complete. As a result, the Federal Reserve continues to closely monitor banks' risk exposures, credit performance, and operations.
This report focuses on developments in three areas:
- Banking System Conditions provides an overview of current financial conditions in the banking sector. Overall, the banking system has demonstrated financial and operational resilience through the COVID event. The report describes measures of health of the system, as well as areas of focus given ongoing uncertainty.
- Regulatory Developments provides an overview of the Federal Reserve's recent regulatory policy work. The Board took a number of policy actions from April 2020 to April 15, 2021. Many of these supported the flow of credit to help underpin economic recovery.
- Supervisory Developments provides an overview of the Federal Reserve's supervisory programs, approaches, and actions in response to the COVID event and its effects on the banking and financial system. The report distinguishes between large financial institutions and community and regional banking organizations because supervisory approaches and priorities differ across these groups.