Summary
One of the principal functions of the Federal Reserve is to regulate and promote the safety, soundness, and efficiency of supervised financial institutions. The COVID event continues to present extraordinary challenges to both financial institutions and regulators, and has imposed widespread and significant damage on households, businesses, and the broader economy.
This report details how Federal Reserve banking regulation and supervision is responding to unprecedented challenges. Unlike 2008, banking organizations have been a source of strength, rather than strain, to the economy, entering the COVID event with substantial capital and liquidity and improved risk management and operational resiliency. In response to the COVID event, the Federal Reserve has made several adjustments to its regulation and supervision, many temporary, to reduce burden on banking organizations and help them meet the needs of their customers and communities.
The future course and timing of the economic recovery remain uncertain, and its pace and intensity are likely to vary across different areas of the country. The Federal Reserve will continue to ensure that its regulations, supervisory policies, and examination activities are effective and efficient. We remain committed to using our full range of tools to support the economy for as long as is needed.