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IPFS News Link • Economy - Economics USA

"Fortress" Balance Sheets? FDIC Slams Biggest US Banks...

• http://www.zerohedge.com, by Simon Black

On Friday morning, a gentleman named Thomas Hoenig wrote some rather unflattering comments about the US banking system in a little known publication called the Wall Street Journal.

In his remarks, Hoenig stated that "while the largest U.S. banks have increased capital since the [2008] crisis, their capital is still lower than the industry average and inadequate for bank resiliency."

Think about what means. A bank's "capital" is essentially its rainy day reserve fund.

If there's a giant mess in the financial system and asset prices collapse (as they did in 2008), a bank with plentiful capital will be able to withstand the crisis.


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