Almost half of big US banks fail to satisfy Fed
More than 40 percent of major U.S. lenders are failing to satisfy the Federal Reserve’s expectations in key areas of risk management, the central bank said Friday in a report that reveals the regulator’s overall assessment of the industry.
The Fed’s inaugural Supervision and Regulation Report highlights a number of positives, but it also shows how risks may now come from mismanagement, cyberattacks and failures to protect the banking system. Those faults are contributing to so many firms failing to make the top two of the five categories that measure a bank’s strength.
The Fed also tallied the number of private internal directives it issues to bankers to fix problems. The biggest U.S. banks get dozens of them each year, and the numbers have generally been declining.
Despite some of the shortcomings revealed in the report, Fed Vice Chairman for Supervision Randal Quarles pointed out at a Washington event earlier in the day that “all the data would show that it’s a very healthy industry.” He and other regulators appointed by President Donald Trump have been revising regulations put in place after the 2008 financial crisis, seeking to reduce capital burdens, dial back stress-test demands and rewrite Volcker Rule limits on banks’ ability to bet with their own capital.