Despite economic headwinds and uncertainties around the Federal Reserve’s next move on interest rates, the banking sector remains strong and healthy, American Bankers Association President and CEO Rob Nichols said today in an interview with Bloomberg TV. As several institutions released earnings this week, Nichols emphasized that “the banks are highly capitalized, they’re investing in innovation, they’ve been cleaning up their balance sheets. I think this is a good earnings picture.”
With respect to interest rates—which many speculate the Fed might cut at its next Federal Open Market Committee meeting—Nichols added that “banks are always looking to the future,” and are preparing now for a falling rate environment. “Banks are all about mitigation of risk,” he said. “There’s a healthy dialogue around the rate environment.”
Nichols also offered his thoughts on Libra, Facebook’s proposed cryptocurrency, which was the subject of a House Financial Services Committee today. He noted that there are many issues to be addressed, including how anti-money laundering/Bank Secrecy Act rules would apply, and how to ensure privacy, security and consumer protection. “These are all the appropriate questions that should be asked,” he said.