Banks Are Far Better Prepared For Next Downturn

By February 19, 2016 Economy, Financial Markets, Lenders

In a recent interview with American Banker, Comptroller of the Currency Thomas Curry acknowledged the challenges facing the banking industry but said recent reforms have made the U.S. banking system more resilient. “I do think that this is an unsettled environment currently,” Curry remarked. “I think our focus as prudential regulators is really on making sure that our supervised entities are prepared for all environments. … Whatever happens with the economy, we have a much stronger banking industry.” He cited higher industrywide capital levels, improved liquidity, and more robust loss provisioning as reasons to be confident that the industry is better prepared for the next downturn. Curry also discussed efforts by the Office of the Comptroller of the Currency to warn about asset classes where banks are weakening their standards, such as subprime auto loans. He added that cybersecurity is a “constant worry,” indicating that a massive enough security breach could threaten the solvency of a smaller bank, and incidents at major banks could undermine confidence in the entire banking industry. “The first step is to have the banks be the first line of defense,” Curry said. “Then the value of the regulatory system, at least in the banking sector, is to be able to supplement that and get a horizontal view of what’s going on in the entire industry.”

From “OCC’s Curry: Banks Are Far Better Prepared for Next Downturn”
American Banker (02/11/16) Wack, Kevin