Supervisors rely extensively on these policies and guidance as they conduct examinations and assign supervisory ratings. Beginning in the summer of 2007, the U.S. and global economies entered a period of intense financial turmoil that has presented significant challenges for the financial services industry. These challenges intensified in the latter part of 2008 as the global economic environment weakened further.
As a result, parts of the U.S. banking system have come under severe strain, with some banking institutions suffering sizable losses. State of the banking system I would now like to briefly summarize overall conditions at U.S. commercial banks and large banking holding companies (BHCs). For U.S. commercial banks as a group, profitability measures deteriorated dramatically during 2008.