ABA Banking Journal - May/June 2015 - (Page 32)
FEATURE
> Q&A
An Interview with
FDIC's
Martin
Gruenberg
A
BA President and CEO
Frank Keating asks the
FDIC chairman's views on
the future of community
banking, cybersecurity
threats, regulatory
burden, too-big-to-fail
and more.
Q
Where do you see the banking
industry going over the next few
years? Do you see any slowdown in
the downward trend in consolidation?
What can the FDIC do to help arrest
this decline?
So I think we have turned a corner.
Banks have taken the opportunity
during the post-crisis period to rebuild
their balance sheets, and their capital
and liquidity positions are strong. That
means that banks are well-positioned
to meet the expected improvement in
loan demand.
Consolidation in the banking industry
has been a growing trend for the past
30 years. Our research has shown that
most consolidation has occurred within
the community banking sector. We
have also found that there is significant
underlying strength in the community
The banking industry has been showing banking model and that community
gradual but steady improvement over
banks play a critically important role
the past several years, and I would
in our financial system and economy.
expect that trend to continue. Banks
Some 93 percent of FDIC-insured
are reporting improved earnings,
institutions met our community bank
better asset quality, and higher loan
definition at the end of last year, the
balances. Also, the number of banks
highest percentage ever. While they
on the problem list declined to the
hold 13 percent of industry assets,
lowest level in six years at the end of
community banks account for 45
2014. One important trend to note is
percent of small loans to U.S. farms and
that community banks are reporting
businesses. The FDIC is the lead federal
greater improvement than the overall
regulator for the majority of community
industry. Earnings at community banks banks and is committed to maintaining
were up significantly from the previous
a strong community bank sector in
year at the end of 2014, and the pace
the U.S. financial system through our
of loan growth at these institutions were supervisory program, extensive technical
appreciably higher than the industry.
assistance, and research.
32
ABA BANKING JOURNAL | MAY/JUNE 2015
Q
What impact will threats to
cybersecurity have on banks?
What tools can the FDIC provide to help
community banks protect themselves?
Cybersecurity has become one of the
most significant issues facing banks,
government agencies, and individuals.
I know it is a particular concern for
community banks, and it is a top
supervisory priority at the FDIC.
The FDIC has been active on a
number of fronts in helping to promote
cybersecurity at the banks we
supervise. For the past year we've been
participating in a broad interagency
cybersecurity assessment to determine
how well the banking industry, and
particularly community banks, manage
cybersecurity and their preparedness
to mitigate cyber risks. The assessment
included a pilot program conducted at
more than 500 community banks and
technology service providers.
We also work with banks to help
strengthen their preparedness for
a cyber attack. And we regularly
alert the institutions we supervise to
emerging cyber threats and discuss
ways to be prepared. For example, we
recently co-sponsored and conducted
Table of Contents for the Digital Edition of ABA Banking Journal - May/June 2015
CHAIRMAN’S VIEW
UPFRONT
ECONOMIC OUTLOOK
LEGAL BRIEFS
PICTURE THIS
CELEBRATING A TRADITION OF INNOVATION
SOUND RISK CULTURE
AN INTERVIEW WITH FDIC’s MARTIN GRUENBERG
NEW RESPA/TILA MORTGAGE DISCLOSURES
BANK DOMAIN ROLLOUT
INVESTOR PERSPECTIVE
MARKETING/RETAIL
PAYMENTS
ADVOCACY
ABA COMPLIANCE CENTER INBOX
CYBERSECURITY
MORTGAGES
OPERATIONS
BOARD MATTERS
FROM THE STATES
BANKER RECOMMENDED READING
INNOVATIONS IN SOCIAL RESPONSIBILITY
INDEX OF ADVERTISERS
ABA Banking Journal - May/June 2015
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