In an effort to promote consumer compliance, our community bank supervisory program focuses our examinations on the areas of highest consumer risk. This has improved the efficiency and effectiveness of our examinations and reduced regulatory burden for many community banks. Banks and consumers benefit when supervision is timely and effective.
Unfortunately, such a virtuous cycle cannot be maintained forever, and when it stops, investments quickly turn into excess capacity and the recouping of capital becomes impossible. In the course of this process, a large part of financial assets turn into non-performing assets. If the volumes are large enough to impair the functioning of the financial system, the whole macroeconomy will stagnate.