U.S. banking conditions remained strong overall in the second half of 2021, with robust capital and liquidity, in addition to improved asset quality. That’s the conclusion of the Federal Reserve Board of Governors, which recently released its latest Supervision and Regulation Report (PDF). The semiannual report covers banking system conditions, as well as regulatory and supervisory developments for the institutions under the Fed’s supervisory umbrella.
Last week, the three federal banking agencies—the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation—released an interagency proposal that would revise banking regulations related to the Community Reinvestment Act (CRA). The CRA was passed in 1977 and the last major revisions to CRA regulations occurred almost 20 years ago.
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U.S. commercial banks continued their bounce back from pandemic-related challenges in 2021, recording satisfactory levels of earnings and asset quality measures well above industry benchmarks. Banks in Eighth Federal Reserve District states fared better too, with profitability and asset quality averages largely in line with national peers.
The Federal Reserve seeks input from a variety of stakeholders to assist it in making decisions about monetary policy, banking supervision and other responsibilities. Earlier this month, we took a look at the contributions of Reserve bank boards of directors and detailed how they are selected and what they do and don’t do as board members.
Like most corporations, each of the nation’s 12 Federal Reserve banks and their branch offices is governed by a board of directors. While many of their duties are similar to those of corporate boards, these boards do have some unique responsibilities as well as restrictions on activities and oversight.
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