The US Financial Situation and Banking System — Implications for Regulation and Monetary Policy

Abstract

The US banking industry has had mixed reactions from legislators, regulators and the public in the last few years. What seems uppermost in most people’s minds is the industry’s exposure to developing countries, highly leveraged transactions, the real estate crisis and the collapse of the savings and loans institutions, with the attendant implications for deposit insurance. These events make the financial sector’s headlines, though there are many other aspects to banking that provide a more welcome picture but are not reported.