This should not be a purely mechanical exercise where the examiner demands that a bank meet or exceed financial indicators for its peer group. Instead, we should use these assessments to understand a bank’s performance relative to peers in the context of its own unique facts and circumstances. The expectations that I have described for both banks and examiners are not just hypothetical.
You may have heard much more about the banks that faltered under intense credit and liquidity pressures, but the Federal Reserve has also been focused on the performance of those community banks that have remained in sound condition throughout the crisis.