Federal Reserve Chairman Jerome Powell told House lawmakers today that the U.S. financial system is “strong, and has been materially strengthened since the financial crisis.” Testifying beore the House Financial Services Committee, he noted that banks today are well-capitalized and highly liquid, and that as a result of the post-crisis regulatory framework, the financial system is “generally in a good place.”
When asked what he viewed as the most significant risk facing the financial system, Powell flagged cyber attacks as a major concern for the central bank. “We have a great game plan for traditional issues like bad loans. . . . [Cyber] is really the frontier where you worry.”
Powell fielded questions from lawmakers on a wide range of issues from climate change to the effort to update and modernize Community Reinvestment Act regulations. While Powell declined to say whether the Fed would issue its own CRA modernization proposal, he indicated that the agency would carefully study the comments received on the joint proposal issued by the FDIC and the OCC. “We want to be very sure that what comes out of this is a proposal . . . that will leave all major participants in CRA better off,” he said, adding that “we think it’s important that each metric, each change that we make is grounded in data.”
