WASHINGTON (Reuters) - The U.S. banking system has strong capital and liquidity and is well-positioned to manage more adverse market conditions, a spokesman for the Office of the Comptroller of the Currency said on Wednesday.
In a statement to Reuters, Bryan Hubbard said the banking regulator was monitoring the effects of falling stock markets on the nearly 1,300 institutions it oversees and would share any relevant systemic information with fellow supervisors through the appropriate interagency forums.
U.S. stocks posted a loss in 2018 for the first time in a decade due to fears over a weakening global economy and the U.S.-China trade war, sparking fears turmoil could spread to other parts of the financial system.
“The federal banking system ... is strong with capital and liquidity near historical highs and improved earnings and risk management. From this strength, the federal banking system is well positioned to manage more adverse market conditions,” Hubbard said in the statement.
He added that OCC expects supervised institutions to understand exposures within their portfolios and take appropriate action to mitigate any risks. These could include adverse effects on liquidity, pricing, or terms for corporate loans and bonds, he said.
On Wednesday, U.S. indexes started the new year down more than 1 percent, although by early afternoon they had inched into positive territory.
Reporting by Michelle Price; Editing by Chizu Nomiyama and Tom Brown