STRESS TESTS have made the financial system more resilient.
Contrasting the current state of banks to their tattered condition in 2009 after the historic financial crisis, Bernanke said the sector's rebound was positive for the broader recovery given the importance of credit to economic growth.
"The resilience of the U.S. banking system has greatly improved since then, and the more intensive use and greater sophistication of supervisory stress testing, as well as supervisors' increased emphasis on the effectiveness of banks' own capital planning processes, deserve some credit for that improvement," Bernanke said in prepared remarks to a conference on financial stability sponsored by the Atlanta Federal Reserve Bank.
In a speech that did not directly touch on the outlook for the U.S. economy and monetary policy, Bernanke hinted at why the central bank continues to pursue an extraordinarily easy monetary policy.
"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.
Some critics have argued the Fed's stress tests are not sufficiently harsh, while banks have complained they do not fully understand the central bank's methodology. ... cont/-
ReplyDeleteSTRESS TESTS have made the financial system more resilient.
Contrasting the current state of banks to their tattered condition in 2009 after the historic financial crisis, Bernanke said the sector's rebound was positive for the broader recovery given the importance of credit to economic growth.
"The resilience of the U.S. banking system has greatly improved since then, and the more intensive use and greater sophistication of supervisory stress testing, as well as supervisors' increased emphasis on the effectiveness of banks' own capital planning processes, deserve some credit for that improvement," Bernanke said in prepared remarks to a conference on financial stability sponsored by the Atlanta Federal Reserve Bank.
In a speech that did not directly touch on the outlook for the U.S. economy and monetary policy, Bernanke hinted at why the central bank continues to pursue an extraordinarily easy monetary policy.
"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.
Some critics have argued the Fed's stress tests are not sufficiently harsh, while banks have complained they do not fully understand the central bank's methodology.
... cont/-