Providing transparency into the health of the nation’s largest banks
Twelve years ago, the economy was devastated by the failure or near failure of many of the nation’s largest banks. A taxpayer-funded bailout, together with a stress test assessment that gave the public a view of the true financial condition of these large banks, brought the financial crisis to an end.
Today, as the country struggles to contain the spread of COVID-19, there is enormous uncertainty about the path of the economy and the true condition of the nation’s largest banks. The public’s ability to assess these large banks is limited, even though taxpayers could be responsible for any future government bailouts.
What tools and information would best equip the public to make these judgments? What government policies could ensure transparency into the financial condition of the largest banks? How can these efforts reduce the chance of future bailouts?
In light of these challenges, the Federal Reserve Bank of Minneapolis will convene leading voices on bank condition assessments, stress tests, and the need for transparency to discuss ways to empower the public to make their own assessments of the strength of large banks. We will also discuss our recently launched stress test tool designed to provide transparency to the public about the state of our financial system.