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CRS – Financial Condition of Depository Banks

Financial Condition of Depository Banks, Darryl E. Getter, Specialist in Financial Economics. March 18, 2013

  • “A bank is an institution that obtains either a federal or state charter that allows it to accept federally insured deposits and pay interest to depositors. In addition, the charter allows banks to make residential and commercial mortgage loans; provide check cashing and clearing services; underwrite securities that include U.S. Treasuries, municipal bonds, commercial paper, and Fannie Mae and Freddie Mac issuances; and other activities as defined by statute. Congressional interest in the financial conditions of depository banks or the commercial banking
    industry has increased in the wake of the financial crisis that unfolded in 2007-2009, which resulted in a large increase in the number of distressed institutions. A financially strained banking system would have difficulty making credit available to facilitate macroeconomic recovery.”

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