Economy: fed notes health of banks.(Accounting & Finance)

Bulletin (Northwest Public Power Association), November, 2003 by Ewing, Scott; Frenz, Jason

Aggressive interest rate cuts by the Federal Reserve, strong balance sheets, and improved risk management kept U.S. banks "unusually healthy" during the 2001 recession, Federal Reserve Vice Chairman Roger Ferguson said. Ferguson told a financial services conference in Boston that the industry's resilience has been "remarkable."

Ferguson noted that, from 1998 through 2002, there was an average of five bank failures a year, compared with more than 200 bank failures on average in the last three years of the 1980s.

"Market measures of bank risk derived from stock prices, subordinated debt spreads, and credit default swaps all signal a healthy banking industry," Ferguson said in the text of his remarks.

Also helping is that banks entered the...

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