Our nation is continuing to make gradual but steady progress in recovering from the financial market turmoil and severe recession that unfolded from 2007 through 2009. Over the past two years, the banking industry has undergone a difficult process of balance sheet strengthening. Capital has been increased, asset quality has improved, and banks have bolstered their liquidity. The industry is now in a much better position to support the economy through expanded lending. However, levels of troubled assets and problem banks are still high. And while the economy is showing signs of improvement, downside risks remain a concern.
The FDIC’s 2012 Annual Performance Plan reflects the agency’s priorities as we continue to address the residual workload from the financial crisis while ensuring that we are prepared to carry out our new responsibilities under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
One of the FDIC’s top priorities during 2012 is to continue to build the agency’s capacity to implement the systemic resolution authority granted to the FDIC by the Dodd-Frank Act. Our goals in this area outline the many steps we will take to ensure that we are prepared to exercise this new authority if it becomes necessary. These include monitoring risk within and across large, complex firms; reviewing the resolution plans (or “living wills”) that will be submitted by the largest and most complex of these companies; establishing our own resolution plans and strategies to respond to potential crisis situations, and coordinating with overseas regulators regarding the significant challenges associated with cross-border resolution. We also plan to complete the remainder of our major rulemaking and legislative mandates under Dodd-Frank in coordination with other financial regulatory agencies.
Another top priority for the agency during 2012 is the FDIC’s Community Banking Initiative, a series of coordinated efforts designed to further our understanding of the future of community banking in this country, enhance our ongoing research activities in this area, and improve our communications with the industry on regulatory and supervisory matters. We will also continue to promote economic inclusion and access to mainstream financial institutions for those who are currently underserved. Key steps include completing and publishing the results of the second biennial National Survey of Unbanked and Underbanked Households and developing a strategy to support the responsible use of technology, including mobile banking, to expand banking services to the unbanked and underbanked.
In addition to these top priorities, this year’s goals continue to emphasize our longstanding core mission responsibilities: protecting and insuring depositors, identifying and addressing risks in supervised institutions, ensuring compliance with consumer protection laws and regulations, resolving failed institutions; and managing the ensuing receiverships.
We are still supervising a historically high number of problem institutions and managing a very large number of receiverships. Although the number and size of insured institution failures has dropped, we expect that our receivership management workload from past failures will remain high for several years to come.
Finally, we are committed in 2012 to building on the successes of the FDIC’s Culture Change Initiative through the pursuit of a continuing series of activities to promote workplace excellence. The FDIC has always been characterized by a dedicated workforce and exceptional teamwork. The great strength of this agency is that we have a very clear and understandable mission. Our employees understand that mission and how their own work relates to and supports the accomplishment of that mission on a daily basis. That has consistently been one of our major strengths identified in the periodic employee surveys we have conducted.
Throughout the FDIC’s 79-year history, insured depositors have counted on quick and complete access to their money, and none have ever lost so much as a penny. The FDIC will continue this unbroken promise in 2012.
Martin J. Gruenberg