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Federal Reserve Supervision Outreach Resources for Bankers
Carl White

Bankers Name Tightening Margins, Cybersecurity as Top Challenges

Maintaining the spread between interest income and interest expense, deposit growth, liquidity, and cybersecurity lead a list of community bankers’ top concerns, according to an annual survey. Several of these concerns spiked from their rankings in the 2022 survey, an indicator of how much the banking environment has changed over the last year.

11/27/2023 Read more about Bankers Name Tightening Margins, Cybersecurity as Top Challenges

The U.S. banking system is sound and resilient, with strong capital and liquidity, according to the latest report on bank supervision and regulation released in May by the Federal Reserve Board of Governors. Nevertheless, bank supervisors are actively monitoring risks associated with credit, liquidity and interest rates. These risks have risen in 2023 because of prevailing economic conditions and uncertainty about the future path of the economy.

A variety of factors—rising interest rates, persistent inflation, concerns about a potential recession and pandemic-related changes in where people work—have prompted concerns about the health of commercial real estate (CRE) properties and the bank loans that support them. Supervisors and economists at the Federal Reserve actively monitor CRE market conditions and the CRE loan portfolios of the banks it supervises.

On March 12, the Federal Reserve launched the Bank Term Funding Program (BTFP), a lending program for eligible depository institutions—banks, savings banks and credit unions—experiencing liquidity issues. The goals of the BTFP are to bolster institutions’ capacity to safeguard deposits and ensure the ongoing provision of credit to communities and the broader economy.

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Take Five is a popular video series featuring St. Louis Fed senior business economist  Kathleen Navin. In each video, Navin provides a quick, concise synopsis of the most recent meeting of the Federal Open Market Committee (FOMC).