Forum Statement on Federal Reserve’s Financial Stability Report

15 Nov 2019

Contact: Julia Lawless
(202) 457-8766

WASHINGTON, D.C. – Financial Services Forum President and CEO Kevin Fromer issued the following statement today regarding the Federal Reserve’s Financial Stability Report:

This report, once again, demonstrates the strength and resiliency of the American banking system. With regulatory capital and liquidity ratios of large financial institutions continuing to hover around historic highs, banks are well-positioned to move the nation’s $20 trillion economy forward. The enhanced risk management that has been incorporated at large banks and throughout the industry has further increased safety and soundness, as evidenced in this analysis. And, today, we know these institutions stand strong, serving customers, businesses and communities across the country. We remain committed to preserving financial stability within the banking system and will continue to pursue effective, pro-growth policies that will help lift the economy and bring more prosperity to our nation.”

Additional Background:
Today the Federal Reserve issued its Financial Stability Report, which provides an overview of the health of the U.S. financial system. Specifically, the report noted, “The largest U.S. banks remain strongly capitalized,” the Federal Reserve said.The most recent stress tests conducted by the Federal Reserve indicate that the largest banks are sufficiently resilient to continue to serve creditworthy borrowers even under a severely adverse scenario.”

To date, Forum members have repeatedly demonstrated the ability to maintain strong capital levels and capital planning processes through severe economic and financial market stress, as evidenced by the 2019 Comprehensive Capital Analysis and Review (CCAR) results.

Together, Forum member institutions have increased their Tier 1 capital by more than 40 percent from nine years ago to $940 billion; doubled their liquid assets since 2010; and simplified their corporate structures. As of the second quarter of 2019, Forum members maintained an average Tier 1 common equity risk-based capital ratio of 12.3 percent, compared to 4.9 percent in 2009.