The Federal Reserve will protect the U.S. banking system from the coronavirus crisis with all of its financial firepower, the central bank’s top regulator said Monday.
“We can only pledge to do what this moment demands,” said Randal Quarles, the Fed’s vice chairman for banking supervision.
“The tools we have are ones no country should ever hope to need; the hour of their use is one no country should ever hope to face,” Quarles said.
His comments came in testimony prepared for a Senate Banking Committee hearing on Tuesday. The remarks were released early by the central bank.
Quarles said the Fed has taken more than 30 regulatory actions since the coronavirus pandemic flared in March to ensure financial institutions could support consumers, households and businesses weather the storm.
“The storm is not over,” Quarles said. There are large, unknown questions: When will concern over the outbreak pass, what will the world look like when it does and how will we return to normal?
“None of us can answer these questions with certainty. But we can affirm our commitment to support those who bear the heaviest burden of the current crisis, and to help them carry the load, by ensuring the banking sector is strong and resilient enough to address the nation’s current economic needs,” Quarles said.
“Banking organizations are well-positioned to serve as a source of strength, not strain, in the current crisis,” the Fed vice chairman said.
Financial firms must make sure to work with their borrowers to offer them flexibility to overcome a hardship “they could not expect and did not create,” he said.
U.S. equity benchmarks were mixed in trading on Monday. The S&P 500 index
was up 0.4% in late-day trading.