Sumber: The Fed | Editor: Hasbi Maulana
GREG ROBB. Over here. Thank you, Chairman. Thank you very much. Greg Robb from MarketWatch. Several of your colleagues recently have been speaking and expressing concern about financial imbalances and rising signs of financial imbalances. I was wondering if you could give us your view on the asset markets. Are--do you see any bubbles? And do you have the tools you need, you think, to combat those? Thank you very much.
CHAIRMAN POWELL. Since the financial crisis, we've been monitoring financial conditions and financial stability issues very carefully, and the FOMC receives regular briefings about the staff framework and sort of measures of various aspects of financial stability risks, and the current view of the Committee is that financial stability vulnerabilities are moderate, let's say, and I'll go through a couple of pieces of that.
So, if you look at the banking system, particularly the large financial institutions, you see higher capital. You see much higher liquidity. You see them more aware of their risks and better able to manage them with stress testing. And if one--if something does go wrong, you've got better ability to deal with the failure of those institutions. So, therefore, you don't see high leverage. You don't see excess risk-taking in great quantity the way you see before the crisis. If you look at households, household balance sheets are in much better condition. If you look at nonfinancial corporations, you see--you do see relatively elevated levels of borrowing, but nothing that suggests, you know, serious risks. And, of course, default rates are very low. So, those readings look okay. I should mention also that for large financial institutions, they're no longer funded by a lot of short-term wholesale funding, which can disappear very quickly. So, they're far less vulnerable to liquidity issues. Overall, those aspects, I think, suggest low levels of vulnerability.
You identified the, really, one area where, which is an area of focus, which is asset prices. So, in some areas, asset prices are elevated relative to their longer-run historical norms. You can think of some equity prices. You can think of commercial real estate prices in certain markets. But we don't see it in housing, which is key. And so, overall, if you put all of that into a pie, what you have is moderate vulnerabilities in our view. In terms of whether we have the tools, you know, we have some tools, and I think we certainly will use them. We have--I think the stress test is a really important tool that we have for the largest financial institutions and for the smaller financial institutions. We regularly use that to--as a way to test against various, you know, market shocks, certainly for the larger institutions.
VICTORIA GUIDA. Hi. Victoria Guida with Politico. More on the regulatory side, you know, the Fed might soon be getting more power to decide exactly which regulations--which stricter regulations to apply to banks with between $100 billion and $250 billion in assets. And so, I had a couple of questions about that. So, for CCAR, those stress tests, since that's based around, you know, having a punitive penalty of potentially being able to restrict dividend payouts or stock buybacks, is there any kind of logistical challenge that could be posed if you don't have CCAR every year for certain banks? Is it possible to have CCAR not on an annual basis? And then, my other question is, you know, you’ve talked a lot about how size isn't the only thing that causes banks to pose systemic risk, and I was wondering what other factors do you think would cause a bank to potentially pose a systemic risk?
CHAIRMAN POWELL. Okay. So, this is a matter that Congress has under consideration. It's not something—so, Congress is looking at raising the threshold for applying enhanced financial standards to--from $50 billion to $250 billion, while leaving us with the ability to reach below $250 billion and apply those standards where we think it's appropriate. And, you know, we haven't been shy about doing that, because, of course, one of the eight SIFIs is below 250 already. So, we are fully prepared to do that. But this is a decision that's in the hands of Congress; it's not something that's been taken. The version of the bill, I think, that passed the Senate did have--did give us the ability to do supervisory stress tests periodically, as opposed to annually, is the language. We haven't made any decision about that at all. We would want to think very carefully about that, and you know, we would, whatever we do decide to do, we’d put that up for comment. Is it, you know, logistically possible? I would think it would be, but it's certainly not something that we've decided to do. And, the second question you had was?
CHAIRMAN POWELL. Sure. Well, it's--I guess the next thing on the list would be activities. So, you know, we--regular way commercial banks that do deposit-taking and lending and don't speculate in markets, you know, that's one business model. Another business model might be, you know, if you think of a hedge fund, right? That's what they do. They're speculating on markets, and you know, so very different business models and different levels of risk and that sort of thing. So, that's, that would be the next thing on the list. I mean, there would be a range of things, you know, how well capitalized is the institution, but mainly those things.
