Financial institutions’ strong capital and liquidity positions have enabled the banking system to support the U.S. economic recovery, the Federal Reserve reported.
Capital: In its latest supervision and regulation report, the Fed said banks entered the pandemic with strong capital positions and built further capital last year. At year-end 2020, capital ratios remain well above regulatory minimums at nearly all firms, it said.
Lending: The Fed also said bank lending has been slow amid the pandemic, with little growth beyond the Paycheck Protection Program. Loan balances peaked in May 2020 and declined through the rest of the year.
