Introduction
The U.S. Banking System Remains Strong
The U.S. banking system continues to maintain strong capital and liquidity levels while maintaining strong profitability and healthy loan growth. U.S. banks are well positioned to continue to support a growing economy.
In Accordance with Our Statutory Mandates, Supervisors Are Focusing on Risks to Banks' Safety and Soundness, Particularly Core and Material Financial Risks...
The Federal Reserve is closely monitoring and addressing vulnerabilities that could lead to bank failures or significant deterioration in financial condition. This approach prioritizes addressing financial risks over process and documentation shortcomings, which will ensure more efficient and effective supervision. As part of this strategic shift, we are updating the supervisory ratings frameworks and changing examination priorities. These reforms and other changes will enhance transparency and increase public accountability.
...and Tailoring Supervision to Each Banks' Risk and Business Profile
The Federal Reserve is focused on effectively and efficiently tailoring the supervisory approach to each bank based on its size, complexity, business model, and risk profile. As banks continue to innovate, supervisors will work to evaluate the benefits of these innovations to the banking system. Concurrently, we will modernize our regulatory and supervisory approaches to facilitate responsible innovation while maintaining our commitment to safety and soundness.
To Optimize Financial Market Functioning and the Provision of Credit to Businesses and Households, the Federal Reserve Is Reviewing the Capital Framework
The Board is comprehensively evaluating the current capital framework. This includes evaluating the supplementary leverage ratio and other leverage ratio requirements, potential reforms to the global systemically important banks (G-SIB) surcharge, the Board's stress testing practices and framework, and Basel III capital requirements.