Large, diversified financial institutions are strong, resilient, and resolvable. Our member institutions act as a solid foundation for the U.S. financial system and the broader economy.
We have taken a number of important steps in recent years to bolster our resiliency and enhance our resolvability. For example, we have substantially improved the quantity and quality of capital and liquidity, making us more resilient to adverse shocks. In fact, our institutions have passed multiple stress tests in which the Federal Reserve reviewed our ability to withstand—and continue to lend through—significant economic shocks.
We have also simplified the structures of our businesses, making our institutions more resolvable. And we have enhanced corporate governance and compliance risk management.
The financial regulatory and supervisory structure has also been strengthened during the past decade, a development that has further bolstered the safety and soundness of our institutions. For example, regulators now have a process to evaluate each firm’s ability to be resolved through bankruptcy, as well as a back-up mechanism to resolve a firm without the use of taxpayer funding. Collectively, these and other key actions enable us to better serve consumers, businesses, investors, and communities.