FDIC Chairman Jelena McWilliams Praises Banks’ COVID-19 Response

The resilience of the banking sector over the past year “has been remarkable” FDIC Chairman Jelena McWilliams told attendees at the American Bankers Association’s Washington Summit today. “I am pleased at how quickly bank management teams have reacted to the new normal and how quickly they responded to the economic shocks associated with the pandemic,” McWilliams said, crediting banks for their quick actions early in the pandemic to set aside funds for potential loan losses.

She also commended bankers for working with borrowers to help keep consumers and businesses afloat. One surprising part of the pandemic, McWilliams said, has been the record level of deposits that have flowed into banks. “In Q1 of last year we had over a trillion dollars flow into the system and in Q2 another trillion, so collectively last year we had $3.3 trillion, which tells me the confidence the public has in the banking system is good, or we would not have seen the record deposits in the banks if that were not the case.”

As regulatory relief measures put in place at the start of the pandemic start to expire, McWilliams said the FDIC will continue working with the other regulators to decide what needs to be done and make adjustments as necessary based on economic conditions and COVID-19 restrictions, adding that “it’s all about being able to allow banks to serve as a conduit for economic recovery so that the pandemic does not cause the financial crisis that we saw 10-plus years ago.”