Promoting a safe, sound, and stable banking and financial system, and fair and transparent financial services
The 1Q21 issue of First Glance 12L notes that waning virus activity and new fiscal stimulus helped boost confidence and reduce unemployment. A brighter economic outlook reduced bank provision expenses, while renewed Paycheck Protection Program activity drove bank loan growth. In the “Spotlight” section this quarter: residential real estate conditions.
The 4Q20 issue of First Glance 12L notes that Paycheck Protection Program loan forgiveness boosted quarterly bank profits but eroded loan growth. Surging winter virus activity hurt employment, but by early 2021, easing case counts, vaccine rollout, and new federal stimulus brightened the outlook. In the “Spotlight” feature this quarter: municipal government fiscal challenges.
The 3Q20 issue of First Glance 12L notes that federal stimulus, low interest rates, and loan modifications continued to blunt the effects of COVID-19 on the economy and banks. However, resurging virus transmission has left the recovery vulnerable. The report highlights banking risks on our radar and recaps selected pandemic impacts.
The 2Q20 issue of First Glance 12L notes that Paycheck Protection Program activity swelled bank balance sheets, distorting several financial metrics. Growth and borrower accommodations held delinquency ratios at bay; however, performance will likely deteriorate once stimulus and forbearance efforts fade. In addition to various hot topics, the report spotlights disparities in household financial stress.
We are ready to restart examination activity and have issued interagency guidance for safety and soundness (SR 20-15). This guidance recognizes that external events such as COVID-19 can have an adverse impact on a financial institution’s condition that may not be reflective of management’s efforts to mitigate these risks. The interagency guidance instructs examiners to consider the unique, evolving, and potential long-term nature of the issues confronting institutions.
Our Pacific Exchanges team recently hosted a special Financial Inclusion and Beyond live virtual event moderated by Sean Creehan, the team’s lead for financial health and inclusion, that explored lessons from around the world in the use of technology and public policy to build more inclusive financial systems and drive financial health. Regular listeners of the podcast will recognize these voices from their episodes throughout the season; the live virtual event allowed them to discuss how they were managing the challenges to inclusion posed by the COVID pandemic.