Search Results
Briefing
Bank Failures: Solvency and Liquidity
Bank failures are almost always preceded by weak fundamentals: bad loans, low capital and/or declining earnings. Meanwhile, depositor panics, while dramatic, are rarely the root cause.Low recovery rates on failed banks' assets and examiners' postmortem assessments both point to deep insolvency, even in banks that experienced runs before failing.Deposit insurance and emergency lending alone cannot prevent crises. Policies that ensure adequate bank capital and sound risk management are essential.
Speech
Address to the Oversight and Investigations Subcommittee, Committee on Financial Services
Good afternoon. I'm honored to speak to this Subcommittee about the federal government's financial safety net and how the Dodd Frank Wall Street Reform and Consumer Protection Act seeks to address it.At the outset, I should point out that within the Federal Reserve System the Board of Governors has sole authority to write rules implementing the requirements of the Dodd-Frank Act. Federal Reserve Banks supervise financial institutions under authority delegated to them by the Board of Governors. In keeping with Board of Governors guidance, I will not discuss any current or potential Federal ...
Speech
Ending 'Too Big to Fail' Is Going to Be Hard Work
Ending the treatment of certain firms as “too big to fail” requires addressing two mutually reinforcing issues: first, the expectation that creditors of some financial institutions are protected by implicit government support, should those institutions become troubled; and second, the obligation many policymakers feel to support certain institutions to protect creditors from losses.The current system encourages fragility, which induces interventions.The Dodd-Frank Act attempts to deal with “too big to fail” through the establishment of the Federal Deposit Insurance Corp.’s Orderly ...
Journal Article
Economic History: The Bank of North America
John Trumbull's "Surrender of Lord Cornwallis" is one of eight paintings depicting significant moments in American history hanging in the Capitol rotunda in Washington, D.C. It portrays the Oct. 19, 1781, surrender of British troops at Yorktown, Va., after the final battle of the Revolutionary War. While the foreground holds the action, the background is dominated by billowing black smoke from the charred, war-ravaged landscape. It's hard to know if Trumbull intended any deeper meaning, but there's no denying that the war's destruction clouded the future of the newly independent United States.
Discussion Paper
Same Sector, Different Stories: How CDFI Credit Union Experiences Vary by Institution Type
Credit unions are a keystone of community banking that date back centuries. Compared to banks, credit unions are cooperative in model, which means they are governed by their membership; they provide financial and depository services to members.One hundred sixty-two community development financial institution (CDFI) credit unions responded to the Federal Reserve's 2025 CDFI Survey. This Regional Matters post captures responses across credit unions — including recent changes in demand, their capacity to meet new demand, and factors that limit their ability to expand financial services to more ...
Discussion Paper
CDFI Survey Results Over Time
This spring, the Richmond Fed led efforts to collect data on community development financial institutions (CDFIs) through the 2025 Federal Reserve CDFI Survey. In general, this year's survey respondents reported relatively strong demand for CDFIs' products, noted the importance of federal funding for their organizations, cited staffing and technological challenges, and expressed hopes to expand in the future.Since 2019, the Federal Reserve CDFI Survey has been conducted every two years (with the exception of a special COVID-19 CDFI Survey in 2020). Understanding the current industry landscape ...
Journal Article
Features: Fighting Payments Fraud
For many people, TikTok has become their go-to source for information on everything from fashion to food to home maintenance. Gone are the days of having to figure it out yourself or "Google it"; influencers now post short videos detailing how to perform any number of supposed "life hacks" meant to make life a little easier or, at the very least, more entertaining. In the past year, one more hack joined the list: check fraud. The hack went viral in the fall of 2024, and it was surprisingly easy: Chase Bank customers wrote checks of significant amounts to themselves, deposited those checks ...
Speech
Ending 'Too Big to Fail' Is Going to Be Hard Work
Ending the treatment of certain firms as “too big to fail” requires addressing two mutually reinforcing issues: first, the expectation that creditors of some financial institutions are protected by implicit government support, should those institutions become troubled; and second, the obligation many policymakers feel to support certain institutions to protect creditors from losses.The current system encourages fragility, which induces interventions.The Dodd-Frank Act attempts to deal with “too big to fail” through the establishment of the Federal Deposit Insurance Corp.’s Orderly ...
Journal Article
Interview: Carmen Reinhart
Carmen Reinhart is a leading authority on financial crises in both advanced and emerging economies thanks to timely and groundbreaking research like her acclaimed 2009 book, This Time is Different: Eight Centuries of Financial Folly, with frequent co-author and fellow Harvard University economist Kenneth Rogoff. Yet despite the influence she has had on the profession, she wasn't drawn to economics until later in life.
Speech
Lacker Testifies on Bankruptcy and Financial Institution Insolvency
Good morning. I am honored to speak to the Subcommittee about the bankruptcy code and financial institution insolvency. In my remarks, I will discuss why I believe it’s so important to improve our bankruptcy code to make it feasible to resolve failing financial firms in bankruptcy. At the outset, I should say that my comments today are my own views and do not necessarily reflect those of the Board of Governors of the Federal Reserve or my colleagues at other Federal Reserve Banks. My views have been informed by both my experience leading the Fifth Federal Reserve District over the last ...