Most banks are well capitalized and prepared for economic
- Banks are well-positioned to handle economic downturns, and
if necessary, absorb losses.
- Customers’ deposits are protected by FDIC insurance. Not one
penny of insured savings has ever been lost by a customer of a
federally insured bank. The FDIC insurance fund has more than $13
billion in assets available to protect depositors.
- The FDIC has temporarily raised its coverage amount from
$100,000 to $250,000 per depositor per insured bank through Dec.
31, 2013. Congress is currently considering legislation,
supported by the CBA that would make the increase permanent.
- Many banking institutions in California are also paying an
additional deposit premium in order to provide the FDIC’s
unlimited insurance coverage for non-interest bearing checking
- Banking’s capital and loan loss reserves serve as a “rainy
day fund” to cover credit losses – is near historic highs. In
fact, capital levels at California banks are at or near all-time
highs, with double the amount of capital today as compared to the
last significant economic downturn in the early 1990’s.
Regulation and supervision of bank risk is improving
- Bank performance data is collected quarterly and continually
monitored by a primary regulator, which for a nationally
chartered bank is the Office of the Comptroller of the Currency
and state chartered bank, the California Department of Financial
Institutions and the FDIC.
- Onsite examinations are conducted every 12 to 18 months or
more frequently if warranted.
- The regulators have also fortified examination practices and
encourage bankers to focus on the quality of enterprise-wide risk
Bank management has responded with deepened integrated risk
- Banks have increasingly put enterprise-wide risk management
processes in place, increased the use of sophisticated
risk-management procedures, and implemented strong systems of
checks and balances.
- Advances in collecting data and benchmarking performance,
identifying key risk indicators and controlling operational risks
all contribute to the sound, active management of a bank’s