Banking

ABA’s Nichols: Despite financial headwinds, banks are healthy and ready

While unpredictability surrounds the U.S. economy at present, America’s banks stay healthy and ready to support the neighborhoods they serve, stated American Bankers Association President and CEO Rob Nichols today throughout an online forum talking about current financial conditions and longer-term results.

“It’s a challenging moment for the U.S. economy, with inflation running at its highest level in a generation, hitting every American in their wallet. We continue to suffer supply disruptions due to the lingering effects of the pandemic and the Russian aggression in Ukraine,” Nichols stated, including that the Federal Reserve has actually been working to slow need by raising rates of interest and strategies to do so up until inflation is under control.

Nichols indicated the Fed’s current Financial Stability Report to highlight banks’ resiliency. He kept in mind that banks have actually kept risk-based capital ratios well above regulative minimums, credit quality stays robust and financing threats at domestic banks stay low after the deposits they got throughout the pandemic. Bank reserves stay above pre-pandemic levels, which Nichols kept in mind is “another sign of the prudent planning and risk management underway as our industry prepares for potential headwinds.”

A considerable hazard to the monetary system today pointed out by the Fed report is the growing variety of nonbanks wanting to use banking services without going through the exact same policy as banks. “We have some concerns about that,” Nichols stated. “New financial players should have to meet the same rigorous requirements as banks if we want to ensure that consumers and the financial system are protected. Innovation is critical to our competitiveness, but markets are also built and sustained on trust.”

Gabriel

A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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