After a brief overview of the current state of the nation's community banks, I will discuss three issues that Federal Reserve supervisors are thinking a lot about and that I know are of great interest to community bankers: credit risk, particularly in real estate; compliance with the Bank Secrecy Act; and, potential revisions to the current minimum regulatory capital requirements for community banks.
But, as you know, it was too late. The experience illustrates that macroprudential policymakers need to have the necessary tools and mandates well in advance of any trouble. It is too late to build the tool-set in the middle of the crisis. Our experiences also demonstrate that policymakers need to be aware of the costs of macroprudential inaction.