The banking system remains strong overall, with robust capital and liquidity and improved asset quality. Supervisors continue to focus on firms' management of capital and liquidity, as well as cybersecurity. While supervisors continue to focus on these core areas, the Federal Reserve is also reviewing the risks created by the increasing use of technology by financial institutions. The Federal Reserve is enhancing its supervisory approaches in response to these risks.

This report focuses on developments in three areas:

  1. Banking System Conditions provides an overview of current financial conditions in the banking sector. In the second half of 2021, banking conditions continued to be strong. Risk monitoring will continue for potential impacts from the pandemic and new geopolitical risks.
  2. Regulatory Developments provides an overview of the Federal Reserve's recent regulatory policy work.
  3. Supervisory Developments provides an overview of the Federal Reserve's supervisory programs and priorities. In addition to core supervisory work, the Federal Reserve is focused on industry changes involving financial technology (fintech) and third-party service providers. The report also highlights differences in supervisory approaches with respect to large, community, and regional banking organizations.
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Last Update: May 12, 2022