The Federal Deposit Insurance Corporation (FDIC) has issued its 2021 Risk Review, noting the banking system’s comprehensive summary of emerging risks enables policymakers and bankers to mitigate scope and impact.
“The U.S. economy and banking system showed remarkable resilience last year following the deepest recession in modern history,” FDIC Chairman Jelena McWilliams said. “Our analysis examines how insured institutions navigated the unprecedented banking landscape in 2020 and the key risks that warrant continued monitoring.”
This year’s report expands coverage of key risks during a time of increased uncertainty. The analysis focuses on the impact of the risks on community banks, particularly considering that the FDIC is the primary federal regulator for most community banks in the domestic banking system.
The FDIC noted the analysis aids in building trust and confidence through openness and accountability. The platform serves as a pillar of the FDIC’s Trust through Transparency initiative.
FDIC-insured institutions navigated an unprecedented banking landscape in 2020 amid the COVID-19 pandemic. Federal support programs cushioned the economy and sought to minimize the pandemic’s banking industry impact.
The report is issued in three sections, with the initial section serving as an executive summary. The second section is an overview of the economic, financial market, and banking industry conditions. The third section is an assessment of the key credit and market risks facing banks.