As supervisor of these holding companies, the Federal Reserve has been actively involved in this matter from the outset and has urged the Commission to work with us, with the institutions, and with the other banking agencies toward a satisfactory resolution. Obviously, this means reconciling different perspectives on this issue.
For example, in light of increased volatility and banking risks in recent years, the banking industry has appropriately maintained robust reserving practices and levels. From a safety and soundness perspective, the Federal Reserve and other banking regulators have expected institutions to maintain strong loan loss reserves that are conservatively measured.