Updated November 2018 (Download as a PDF)
Our value to the economy
Forum member institutions support economic growth by lending to consumers, businesses, and other financial institutions, and foster deep and liquid capital markets that allow the U.S. government and private institutions to finance public spending and investment.
- Supporting Savings and Investment Through Lending
- Supporting Deep and Liquid Capital Markets
- Improvements in Resiliency, Resolvability, and Supervision
Forum members hold more than $4 trillion in loans, accounting for 43 percent of total lending to businesses and households.
Lending to Consumers
We provide nearly half of all consumer loans. Consumer lending supports loans for a variety of household needs, such as the purchase of a new car.
Commercial and Industrial (C&I) Lending
Sources: Federal Reserve data, Assets and Liabilities of Commercial Banks in the United States – H.8, available at https://www.federalreserve.gov/releases/h8/default.htm; FR Y-9C data, available at https://www.ffiec.gov/nicpubweb/nicweb/HCSGreaterThan10B.aspx
Small Business Lending
We are a major source of lending to small businesses, helping the economy grow at both a community and national level.
Forum members hold $86 billion in business loans less than $1 million, representing one-quarter of all such loans to small businesses.
We also provide $54 billion in business loans less than $100,000, representing a third of all such loans to small businesses.
Forum members lend to small businesses across the United States
Forum member small business lending supports entrepreneurship across the nation and in a wide array of communities.
- These data reflect originations of small business loans from 2010-2017 by Forum members.
- Small business lending is spread throughout the United States and areas with the highest percentage of small business lending per capita represent a diversity of geographic regions.
Lending to Other Financial Institutions
We meet three-quarters of the funding needs of other financial institutions. Lending to financial institutions supports the needs of community banks, insurance companies, and mortgage finance companies, which provide important services to businesses and households.
Total Debt and Equity Underwriting Activity
Our members underwrite nearly three-quarters of debt and equity transactions—such as initial public offerings—among large institutions in the U.S., providing a critical service that other U.S. institutions cannot offer on a similar scale.
Our underwriting activities:
- foster deep and liquid capital markets
- support corporate investment in the real economy
Note: The data cover debt and equity underwriting for all holding companies with total consolidated assets in excess of $50 billion
With $3 trillion of assets under management, we support retirement and other saving needs.
Municipal Securities Holdings
With roughly $165 billion in municipal securities holdings, we finance a significant portion of state and local government expenditures, such as hospitals, roads, bridges, and schools.
- Our holdings of municipal securities also foster liquid secondary markets, thus improving the ease and cost with which state and local governments can access capital markets and finance public spending and investment.
U.S. Treasury Securities
With nearly $550 billion in U.S. Treasury securities holdings, we also finance a significant portion of federal government expenditures.
- Our holdings of U.S. Treasury securities also foster liquid secondary markets, thus improving the ease and cost with which the U.S. government can access capital markets and finance public spending and investment.
We have substantially improved our capital and liquidity positions in the past several years. In addition, a number of regulatory and supervisory changes have led to further improvements in our resiliency and resolvability.
Improvements in Capital and Liquidity
Improvements in Tier 1 Capital and Resiliency
We have significantly enhanced the quality and quantity of our capital over the past nine years. Since 2010, Tier 1 capital has increased by nearly 40 percent and has grown as a share of risk-weighted assets and total capital. Our members currently maintain $900 billion of Tier 1 capital.
Both dollar amounts of capital and capital ratios have improved markedly since 2010, and the share of capital accounted for by high-quality Tier 1 capital has improved markedly.
Improvements to Total Loss Absorbency
Since 2008, Forum member’s total loss absorbency – measured by convertible long-term debt, Tier 2 capital, common equity Tier 1 and additional Tier 1 capital – has grown by nearly $900 billion, a 200 percent increase that substantially improves Forum members’ ability to withstand losses.
- Common equity Tier 1, the most loss absorbing form of capital, has grown more than $515 billion since 2008, and has increased as a percent of total Tier 1 capital, from 45% to 87%.
- Estimated convertible long-term debt, debt that may be converted into equity to absorb losses, will be required and in place by January 1, 2019.
Improvements to Liquidity Profile
We have also greatly increased our liquidity profiles and now hold more than $2.5 trillion in high-quality liquid assets (HQLA). Since 2010, HQLA has doubled.
- Increased liquidity complements increased capital and improves resiliency to adverse shocks.
- We have substantially increased HQLA, both in dollar amount and relative to total assets.
Note: HQLA is reported according to Basel III at the Bank Holding Company level
Improvements in Regulation and Supervision
Additional Regulatory and Supervisory Developments
In conjunction with significantly higher levels of capital and liquidity, several post-crisis regulatory and supervisory reforms have greatly increased the resiliency of the U.S. financial system.
- Enhanced Supervision: Increased supervision at member institutions further promotes safety and soundness
- Orderly Liquidation Authority (OLA): A new legal and structural framework for resolving large banks lowers the cost of resolving a member institution
- Living Wills: Members have undertaken an extensive review and planning process designed to improve their resolvability under bankruptcy
- Total Loss-Absorbing Capacity and Long-Term Debt Requirements: New requirements to issue long-term debt and equity support the OLA resolution process
- Derivative Reforms: Mandates for central clearing, margin, and recognition of stays reduce systemic risks from derivatives