“The US Federal Reserve Assures Resilient Banking Sector Amid Recent Turmoil”

WASHINGTON (Reuters) – The U.S. Federal Reserve said on Monday that the U.S. banking sector is generally in a good position to weather recent turbulence, although the experience may overshadow credit conditions going forward.

In its semi-annual financial stability report, it added that the overall funding risk faced by banks remains low and that companies still have ample liquidity.

He said additional efforts by U.S. banking regulators following the sudden collapses of Silicon Valley and Signature banks in March should shore up the system if further pressures were to come.

“The Federal Reserve is prepared to address any liquidity pressures that may arise, and is committed to ensuring that the US banking system continues to perform its vital roles,” he added.

The US central bank said in its report on Monday that more than 45 percent of bank assets are due to re-price or mature within a year, indicating a lack of significant exposure to less valuable securities for extended periods of time.

He added that although the volume of uninsured deposits in banks is declining, they are still higher than historical averages after an influx of deposits due to the COVID-19 pandemic.

The bank released the report shortly after it published a survey which found that banks are tightening credit standards in light of weak demand for loans.

(Prepared by Muhammad Ali Farag for the Arabic Bulletin – Edited by Yasmine Hussein)