Fed Supervision, Regulation in Covid

On Apr. 30, Fed released Apr. 2021 supervision and regulation report.

  • Fed semiannual report to inform on efforts to promote safety, soundness in banking.
  • In conjunction with semiannual testimony to Congress, by Vice Chair for Supervision.
  • Included data on banking conditions, board’s supervisory, regulatory policies, actions.
  • Issue focused on regulatory, supervisory response to Covid economic, financial stress.
  • Report Structure
  • 3 main sections on banking system conditions, regulatory, supervisory developments.
  • Overview of trends, market indicators, policy work, pending rules, themes, priorities.
  • Described measures of health of system and areas of focus given ongoing uncertainty.
  • Report Highlights
  • Banking system demonstrated financial, operational resilience throughout COVID-19.
  • Financial institution's capital and liquidity positions remained robust, enabled recovery.
  • Banks took actions, like technological investment, to maintain operational resilience.
  • Reported that profitability of banks has mostly rebounded to pre-COVID-event levels.
  • Key market indicators reflected improved conditions, banks played vital role in PPP.
  • However, lending activity slowed after May 2020 peak, little growth beyond PPP loans.
  • Decline in net interest margin accelerated in 2020; delinquency rate slightly increased.
  • Loan modification activity activity continued, but declined after peak in Q2, Q3 2020.

Regulators Fed
Entity Types B/D; Bank; Ins; SIFI
Reference PR, Rp, 4/30/2021; COVID-19;
Functions Compliance; C-Suite; Exams; Financial; Reporting; Risk; Treasury
Countries United States of America
Products Banking; Insurance; Loan; Securities
Regions Am
Rule Type Guidance
Rule Date 4/30/2021
Effective Date 4/30/2021
Rule Id 104290
Linked to N/A
Reg. Last Update 4/30/2021
Report Section US Banking

Last substantive update on 05/03/2021