Washington, April 9 (IANS) The US banking sector has grown much stronger since the financial crisis, which has contributed to the improvement of the overall economy, said Federal Reserve Chairman Ben Bernanke.
“Today the economy is significantly stronger than it was four years ago, although conditions are clearly still far from where we would all like them to be,” he said Monday when addressing a financial markets conference sponsored by the Federal Reserve Bank of Atlanta.
“Because bank credit for households and businesses is critical to continued economic expansion, it is positive for the recovery that banks are also notably stronger than they were a few years ago,” he noted.
He added that the results of the most recent stress tests and capital planning evaluations continue to reflect improvement in banks’ condition, reported Xinhua.
Results released last month showed that 17 of the 18 largest banks passed the latest round of stress test, evidence that most US big banks have enough capital buffers to withstand a deep economic recession.
The Fed oversees Wall Street’s biggest banks, including Citigroup, Bank of America,
JPMorgan Chase & Co., and Wells Fargo.
The Fed has performed periodic stress tests on the major banks it supervises since 2009.
Bernanke noted that US banks, large and small, have generally improved their liquidity positions compared to pre-crisis levels. Bank’ holdings of cash and high-quality liquid securities have more than doubled since the end of 2007 and now total more than $2.5 trillion.
However, he added that in the area of liquidity and funding, continued improvement is still needed on some dimensions and the Fed would continue to increase the transparency of stress testing process and its assessments of bank’s capital planning.