As we gear up for the 2025 Federal Reserve CDFI Survey, this post paints a picture of the current state of CDFIs and seeks to understand what might differ from our 2023 survey results.

Prior to deregulation, banks were essentially confined to the borders of their home states.

What was different about the banks that experienced runs during the March 2023 banking crisis, such as Silicon Valley Bank?

Ricardo Reis discusses how swap lines have supported the flow of US currency into global financial markets to meet their liquidity needs and the dollar's prominence in those markets, especially during the 2007-08 financial crisis and the COVID-19 pandemic. Reis is an economics professor at the London School of Economics and a long-term consultant at the Federal Reserve Bank of Richmond.

What impact could "buy now, pay later" have on other payment forms and on financial stability as a whole?

The authors propose an approach for generating financial market scenarios for stress testing financial firms' market risk exposures.

The runs lasted two days and were driven mainly by a relatively small number of large depositors, though it affected many other banks.

The ideal regulatory structure for stablecoins, a type of cryptocurrency backed by existing assets, has been a contentious question among members of Congress, especially in deciding the primary regulator.

For our 150th episode, Anna Kovner reviews her career path to becoming the research director at the Federal Reserve Bank of Richmond and reflects on the work of the Bank's Research department. Kovner also offers her views on various topics — including the banking turmoil of 2023, the Fed's "lender of last resort" role, current risks to the financial system, and the "neutral rate" of interest — as well as the current state of the national economy.

Alaina Barca and Surekha Carpenter examine the decline in the number of bank branches in certain communities and the economic effects of that trend. They also share data from the Banking Deserts Dashboard developed for the Fed Communities website. Barca is a community development research analyst at the Philadelphia Fed and Carpenter is a research analyst at the Richmond Fed.

Toan Phan reviews the risks faced by banks from the increased frequency and intensity of floods and other extreme weather events, and how banks and financial markets have responded to those risks. Phan is a senior economist at the Federal Reserve Bank of Richmond.

Strong economic growth has helped to mitigate risks to banks from commercial real estate, but bank supervisors will be closely monitoring those risks in loan portfolios.

Anne Davlin discusses the current state of lending to the commercial real estate sector in the Fifth District, including the challenges faced by office building and multiunit housing developers and the ensuing risks posed to their lenders. Davlin is a senior quantitative analyst in the Richmond Fed's Supervision, Regulation and Credit department.

This paper offers novel insights on modern bank runs using confidential data on wholesale and retail payments to detail the bank runs of March 2023.

The authors find evidence that bank capital matters for the tails of future GDP growth, with a relationship that is particularly strong in reducing the probability of the worst GDP outcomes. The relationship between bank capital and growth, however, is not strong for its central tendency.

Data from Fed Communities' Banking Deserts Dashboard show how in-person banking access changed in the Fifth District from 2019 to 2023.

The authors study how changes in banks' lending standards affect economic activity, inflation, and interest rates to gain a better understanding of the macroeconomic effect that banks can have.

The Fed moved quickly to support the financial system during a banking panic last spring. Now, policymakers are evaluating what they learned.

The authors shed light on the role of competitive forces in how banks manage emerging risks and relevant supervisory challenges.

The effects of classifying neighborhoods by riskiness of home lending in the 1930s may still have modest effects on interest rates and fees today.

Daniel Weitzner, an information security expert at MIT, discusses the cyber threats to the financial services industry and the challenges of measuring and modeling those risks. He also shares learnings from a recent conference co-hosted by MIT, the Federal Reserve Bank of Richmond, and the Federal Reserve System Board of Governors.

The Supreme Court recently heard arguments in two cases that could overturn a long-standing precedent for how agencies should implement laws passed by Congress.

It depends on their respective competitive landscapes.

The second Conference on Measuring Cyber Risk in the Financial Services Sector continued the important discussion around cyber data needs to help financial services firms better manage cyber risk. Hosted by the Richmond Fed, the Federal Reserve Board and MIT, the conference was held in January 2024 on the MIT campus in Cambridge, Massachusetts.

What do various economic schools of thought say about the use of money?

Leaders within the Senate have arrived at a bipartisan proposal, known as the Recovering Executive Compensation Obtained from Unaccountable Practices (RECOUP) Act, that would claw back compensation from some executives of failed banks.

The Reserve Bank boards of directors are a key link between the Federal Reserve System and the communities it serves, working to achieve the dual mandate and formulate monetary policy.

This model explains how an increase in intermediation costs leads to structural changes in the corporate bond market

The Federal Reserve Bank of Richmond, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation are sponsoring a training on the Community Reinvestment Act (CRA) 101 for bankers only. The workshop will cover CRA Basics designed for new and less experienced CRA bank officers.

While a singular complaint may not be indicative of a large or systemic problem, multiple complaints on the same issue can more clearly indicate a broader issue. The key to understanding which of these two scenarios you have is maintaining an effective complaints management process.

We speak to trends in examination findings, offer resources like the Cyber Sim Lab to complement your risk and resilience practices, and update you on our District happenings through our banking outreach.

As the year comes to a close, now is a great time to start thinking about your year-end Call Report. Our Statistics team within Supervision, Regulation and Credit at the Richmond Fed would like to share some tips to ensure that your next submission goes smoothly.

Tom Bilston and Tony Murray of the Richmond Fed's bank supervision team discuss how banks use machine learning, chat bots and other forms of AI as well as what these technological innovations mean for bank examiners, both in terms of the risks they monitor and how they do their job.

A lot of factors influenced the banking turmoil of 2023. This article provides perspectives on some of those factors.

In July, the Fed launched its first new payment service in more than 40 years. FedNow enables money to move instantaneously from sender to recipient 24 hours a day, seven days a week — weekends and holidays included.

The Consumer Financial Protection Bureau has been a source of debate since its creation in 2010. A case currently before the U.S. Supreme Court challenges the constitutionality of its funding structure.

Growth in the crypto-asset industry and recent events underscore the need for banks to have the appropriate systems, effective internal controls and risk management processes in place.

It is no secret that commercial real estate (CRE) has bubbled up to the top of most lists of key risks facing the banking industry. Coming in September, Ask the Regulators will conduct a webinar on the latest guidance SR Letter 23-5: Prudent Commercial Real Estate Loan Accommodations and Workouts.

Learn more about implementation of Section 1071 of the Dodd-Frank Act amending the Equal Credit Opportunity Act (ECOA), which requires the collection and reporting of credit application data for small businesses lending, including women- and minority-owned businesses, and also about regulatory changes to Home Mortgage Disclosure Act thresholds.

Borys Grochulski and John O'Trakoun share the latest data on the market for office buildings and commercial real estate in general. They also discuss the current state of lending to office developers and whether the rise in office vacancies poses risks to the broader economy. Grochulski is a senior economist and O'Trakoun is a senior policy economist at the Federal Reserve Bank of Richmond.

On the 100th episode of the podcast, three leaders of the Richmond Fed 's Research department — Kartik Athreya, Huberto Ennis and Ann Macheras — share the research paper that had a major impact on their careers and the economics profession in general. Paper topics range from bank runs to insuring against risks to knowledge spillovers.

Richmond Fed Research Director Kartik Athreya shares takeaways from the annual Technology-Enabled Disruption Conference, co-hosted by the Richmond, Atlanta and Dallas Feds.

The most recent District Dialogues program explored ways that extreme weather is affecting the economy and Fifth District communities.

As the news is unsettling, it's worth taking some time to understand how bank runs happen. Nobel Prize winners Doug Diamond and Philip Dybvig developed a model that sheds light on this question.

The persistence of hybrid work has left many wondering about the future of offices. With workers coming in less often, some companies have decided that they need less space. What does that mean for the banks that finance commercial real estate?

In his July 1832 veto message of the bill rechartering the Second Bank of the United States, President Andrew Jackson triggered the demise of America's second central bank with a stroke of his veto pen.

Financial institutions have approached AI with cautious optimism, developing and implementing AI-based applications for things like customer service chatbots, detecting fraud, and evaluating creditworthiness. Bank supervisors are learning how to adapt.

The recent bank failures at Silicon Valley Bank, Signature Bank, and First Republic Bank have brought banking policy back into the forefront of the national policy debate.

With negotiations still underway, some unconventional ideas are being suggested in case a U.S. spending deal can't be made. Today, we'll look at one such suggestion: minting a high-dollar platinum coin.

Surekha Carpenter discusses why adequate access to credit is important for individuals and the economy overall, what contributes to gaps in access, and how community development financial institutions have addressed those gaps. Carpenter is a research analyst on the Regional and Community Analysis team at the Federal Reserve Bank of Richmond.

Gadi Barlevy discusses recent research on the potential tension between the Fed's roles in maintaining low, stable prices and providing liquidity when financial markets are in trouble. Barlevy is a senior economist and economic advisor at the Federal Reserve Bank of Chicago. He was interviewed on Feb. 8, 2023, before the spate of bank failures that occurred in March 2023.

FTX and its affiliated arms seemed to create a risky situation that ultimately fell apart.

Third quarter 2022 loan growth was strong as Fifth District banks outpaced the nation in all loan categories even as rates continued to increase.

In 2020, some prosecutors described suspicious activity related to illicit use of pandemic relief as one of the largest frauds in U.S. history.

The Federal Reserve launched a new resource designed to help lenders understand the Metropolitan Statistical Area boundaries and demographics due to the 2020 Decennial Census update.

The Treasury bond market suffered a liquidity crisis at the start of the COVID-19 pandemic. What reforms are needed to make sure it doesn't happen again?

Ethan Bullard tells the story of Maggie L. Walker, focusing on her legacy as a bank executive, entrepreneur and activist who worked against systemic discrimination against women and blacks. Bullard is curator at the Maggie L. Walker National Historic Site in Richmond, Va.

Some believe declines in physical-asset prices prior to recessions make the recessions worse, but recent literature challenges the strength of that connection.

We construct a novel signal of bank expectations utilizing confidential data and a regulatory constraint imposed on bank internal capital markets during the 2008 crisis that made internal equity injections to commercial bank subsidiaries difficult to reverse.

Results from a recent national Fed survey show that community development financial institutions (CDFIs) and the communities they serve are facing less severe disruptions than last year. Still, staffing and other challenges are preventing CDFIs from fully meeting growing demand for their products and services.

Maggie Lena Walker built the St. Luke Penny Savings Bank to last. When it opened its doors in Richmond's Jackson Ward district in 1903, Walker became the first Black woman to establish a bank in the United States.

The Richmond Fed introduced its Cyber Simulation Lab for managing cyber-attacks during its 2022 Community and Regional Bankers Forum.

By providing ready access to funding, the Federal Reserve’s discount window helps depository institutions manage their liquidity risks efficiently and avoid actions that have negative consequences for their customers.

Learn about key trends and considerations related to balance sheet management and interest rate risk practices in a highly dynamic economic environment.

Learn more about the tools available to assist financial institutions in accounting for Current Expected Credit Losses (CECL).

Properly regulating stablecoins could achieve the same objectives as issuing a central bank digital currency.

A look at how the Temporary Asset Threshold Relief program aided community banks during the pandemic.

Prompt notification of cyber incidents helps the Federal Reserve make timely decisions related to the safety and soundness of supervised firms and the financial system.

Perhaps history can be a guide on whether central banks should issue digital currencies.

Even exploring a CBDC without ultimately issuing one can provide significant benefits.

Our paper studies the role of the collateral channel for bank credit using confidential bank-firm-loan data.

This essay discusses the ideas and contributions in Marvin Goodfriend and Robert G. King's 1988 paper and relates it to some of Goodfriend's other research on banking and monetary policy.

Vanity McDaniel and Zhu Wang review the Federal Reserve's important role in the payments system, from cash and check processing to supporting innovations in electronic payments. McDaniel is a senior payments business analyst in the Payments Outreach group and Wang is vice president for research in financial and payments systems in the Research Department at the Richmond Fed.

The end of 2021 brought with it the expiration of several important COVID relief programs, including changes to the CARES Act Section 4013, Community Bank Leverage Ratio and the FDIC’s interim final rule.

The Federal Reserve System has developed an automated process for member banks’ reporting of non-merger-related adjustments to their subscriptions to Reserve Bank capital stock by utilizing filed Call Reports. 

How the Standing Repo Facility interacts with resolution planning at large banking corporations will depend in part on guidance provided by regulators.

After regulations were implemented, dealer capital commitment, trade frequency and size decreased, while dealer bid-ask spread increased.

Is money essential? How do self-interested parties bargain to achieve mutually beneficial outcomes? These were among questions addressed at a recent research conference.

Do payday loan regulations help or harm consumer welfare? How many firms close due to financial market inefficiencies? These were among questions addressed at a recent research workshop.

Read the Federal Reserve’s semi-annual Supervision and Regulation report, published in November, to see information about banking conditions, risks that banking institutions face and supervisory developments.

Check out the valuable highlights from the BSA Coalition’s highly regarded law enforcement webinar. Panelists discussed suspicious activity report filings on Paycheck Protection Program fraud and tips to avoid cyber fraud.

The SCALE tool uses publicly available data from Schedule RI-C of the quarterly call report to derive the initial proxy for expected lifetime loss rates. The data is available on the CECL Resource Center on the SCALE tab in the resources section or at RI-C - CECL Resource Center.

Climate change presents a number of risks to financial institutions, from impacting customers’ ability to repay loans to business transitions brought on by a greener economy. This climate change primer can help you and your institution understand both the acute and chronic risks of climate change and what to consider when planning for the future.

As the pandemic lingers, our supervisory posture remains virtual—and staying flexible and nimble are important now and will remain so into the future. Our examination teams will focus on three key areas as we resume exams: loan risk ratings, capital preservation, and liquidity resilience. 

The Fed's relatively new repo facilities may create greater price certainty, but the Fed's intervention may mute valuable market signals regarding economic efficiency and stability.

Fed staff have created the simple, spreadsheet-based SCALE tool to help community banks implement the CECL accounting standard. Read on to see if it may be able to aid your institution.

Private flood insurance may be a more cost-effective option for customers over policies backed by the National Flood Insurance Program. Let us help you wade through the sea of information.

Are you considering all the impacts to your customers when you debate closing a branch? In addition to the economic and financial impact of closing a branch, it’s crucial to consider the legal and compliance risks related to Community Reinvestment Act (CRA) ratings and fair lending as part of a branch evaluation.

Facebook and Amazon are examining creating digital currencies, like Alibaba has. What drives platforms to develop these currencies, and should central banks be worried?

The policies were gradually phased out in many advanced and emerging economies. Will they come back?

Newly available data show that larger and less liquid banks use the discount window more actively and that holdings of bank reserves are negatively correlated with discount window borrowing. Access to the discount window affects bank portfolio decisions, in particular holdings of reserves, in subtle ways.

In the world of cyber fraud, account takeovers loom large. Red flags to look for in order to protect bank customers. 

Analysis by our Enformecent and Legal Risk Unit shows how fraudsters exploited unemployment claims during the pandemic. 

The BSA Coalition's fifth webinar of 2020 drew more than 400 attendees.

The Richmond Fed's Enforcement and Legal Risk Unit looks at suspicious activity reports by Fifth District state member banks.

We study new transaction-level data of discount window borrowing in the U.S. from 2010–17, merged with quarterly data on bank financial conditions (balance sheet and revenue).

Recently, the Dodd-Frank Act has arguably played an important role during the coronavirus crisis. It's a good time to take another look.

In Taming the Megabanks, Arthur Wilmarth Jr. of George Washington University Law School explores the implications of the gradual erosion and ultimate repeal of the Glass-Steagall Act's banking restrictions.

Economists at the Richmond Fed analyze the role of dealer-provided liquidity in sovereign credit default swap markets.

We construct and calibrate a monetary model of corporate finance with endogenous formation of lending relationships. The equilibrium features money demands by firms that depend on their access to credit and a pecking order of financing means.

Potential exposure to COVID-impacted industries has caused some firms to refocus on their capital preservation. A few bank holding companies have chosen to raise subordinated debt in an effort to strengthen existing capital at their subsidiary banks. Regardless of the rationale, here are a few reminders on handling subordinated debt.

The Federal Reserve’s FraudClassifierSM Model, developed by the Fraud Definitions Work Group, aims to develop consistency in the terminology used by the payments industry to describe payments fraud.

The Federal Reserve developed and fielded a survey of community-based organizations to better understand the impacts of COVID-19 on their operations and the communities they serve. Fifth District respondents in April and June expressed that while organizations and communities are experiencing significant disruptions, effects are expected to be longer-lasting for the latter.

The market for repurchase agreements has repeatedly adapted to changing circumstances.

Recent Richmond Fed research has shed new light on the functioning of the discount window and the role that stigma may play in achieving desirable outcomes.

Hemp is a growing business, and bankers are increasingly receiving calls from customers involved in it. The December 3, 2019, interagency statement may help in your discussions and processes for deciding whether to bank hemp customers.

Is your board of directors aware of the number of loan policy exceptions in your bank’s loan portfolio and what types of exceptions are being made? Banks with effective credit risk practices will have the ability to answer these questions—read the three-step process that will ensure you’re one of them.

Banks in the United States have long had choices between state and federal banking authorities.

The technology behind cryptocurrencies shows promise for raising capital but has also drawn scrutiny from regulators.

Prior to the advent of modern home mortgage markets in the United States, markets in which mortgage-backed securities and government-sponsored enterprises now play significant roles, prospective homebuyers had to rely on other mechanisms of home finance.

The choice between bankruptcy or bailout trades off different sets of costs on the economy. This Economic Brief presents a new tool that could assist policymakers with this evaluation, potentially helping to curb the "too big to fail" problem, serving as a useful complement to the "living wills" process, and making the resolution process more transparent.

This Economic Brief reviews the intuition and theory behind bank runs and the most popular proposed solutions.

A tax exemption has helped credit unions since the 1930s, but some argue they should be treated more like banks

Central banks play strong roles in domestic financial stability policy, but the full scopes of their financial stability mandates are ambiguous.

There are 12 Federal Reserve Banks across the country: How did one land in Richmond, Virginia?

As a way to understand the origins of this expectation, in this Economic Brief we look at the relationship between the federal funds rate and the average net interest margin for U.S. banks since the mid-1980s. We find that the relationship is not as clear-cut as one might suspect.

The rate of new-bank formation has fallen from an average of about 100 per year since 1990 to an average of about three per year since 2010. If this change persists, it will have a large impact on the composition of the banking sector as well as the flow of credit in the economy.

The most recent study published by the Association of Statisticians of American Religious Bodies estimates that Islam was the fastest-growing religion in the United States between 2000 and 2010. Yet there are relatively few financial products available here for those followers who require their financial contracts to comply with Islamic laws and moral codes, called Sharia law.

Richmond Fed president Jeffrey M. Lacker spoke about the use of the Bankruptcy Code to resolve large complex financial institutions.

I study firm characteristics that justify the use of options or refresher grants in the optimal compensation packages for CEOs in the presence of moral hazard.

Are we losing the fight against next-gen bank robbers? The Fed's study found that payment cards were used in 92 percent of fraudulent transactions, with checks and electronic check transfers making up the remainder.

Richmond Fed President Jeffrey M. Lacker addressed business leaders during a luncheon hosted by the Rotary Club of Charlotte in Charlotte, N.C.

One suggested hypothesis for the dramatic rise in household borrowing that preceded the financial crisis is that low-income households increased their demand for credit to finance higher consumption expenditures in order to "keep up" with higher-income households.

Recent research suggests that young borrowers are actually among the least likely to experience a serious credit card default. One reason why people obtain credit cards early in life may be to build a strong credit history.

Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, testified Dec. 3 about bankruptcy and financial institution insolvency to a subcommitee of the U.S. House of Representatives Committee on the Judiciary.

Many merchants have complained that the fees far exceed issuers' costs for processing such transactions. In response to those complaints, Congress directed the Federal Reserve to impose a cap on debit card interchange fees.

Young borrowers are the least experienced financially and, conventionally, thought to be most prone to financial mistakes. We study the relationship between age and financial problems related to credit cards.

This paper studies intended and unintended consequences of price cap regulation in the two-sided payment card market.

Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, addressed the Council on Foreign Relations on May, 9, 2013, as part of the C. Peter McColough Series on International Economics.

Richmond Fed President Jeffrey Lacker discussed the "too big to fail" issue during the Global Society of Fellows conference held April 9 at the University of Richmond in Richmond, Va.

Richmond Fed President Jeffrey Lacker speaks with students and faculty at Franklin & Marshall College in Lancaster, Pa.

This paper provides a new theory for two-sided payment card markets. Adopting payment cards requires consumers and merchants to pay a fixed cost, but yields a lower marginal cost of making payments.

In recent years, large positive and negative balances have arisen in TARGET2, the interbank settlement and payments system of the Eurozone. These balances show that the Deutsche Bundesbank, the central bank of Germany, has become a large net creditor to the European Central Bank (ECB).

This Economic Brief explores the need for and challenges facing the small-dollar loan market in the United States.

This paper examines the optimality of fiscal rules and measures their aggregate effects using a baseline sovereign default framework.

Lacker on Understanding the Interventionist Impulse of the Modern Central Bank,CATO Institute Monetary Conference

Lacker Addresses Business, Community and Economic Development Leaders in Salisbury, Md.

Lacker Addresses Northern Virginia Business and Community Leaders

Rising interchange fees, along with the growing dominance of card transactions in the payments system, have brought increasing scrutiny from regulators on the appropriate level of interchange fees and the competitive aspects of card networks.

Richmond Fed’s Jeff Lacker addresses the Oversight and Investigations Subcommittee of the Committee on Financial Services

Lacker speaks in New York, NY -- Feb. 25

Since the recession started in 2007, there has been a growing concern that small businesses may lack adequate access to credit. This Economic Brief examines the complexity of small business credit issues.

Lacker addresses RMA -- Richmond Chapter, Jan. 14

Reviews the Bank's operations and includes the article entitled "The Financial Crisis: Toward an Explanation and Policy Response"

Cover Story: Downtown is Dead. Long Live Downtown.
America is busy rebuilding its downtowns. But these are not the downtowns of yesterday.

Cover Story: Academic Alternatives
The theory of school choice sounds great, but it remains controversial. Now, evidence from programs like the one in Milwaukee is beginning to move the discussion from the theoretical to the practical.

Cover Story: Charged by the Market.
Electricity deregulation is finally starting to stir up retail competition in Maryland.

Cover Story: Homeward Bound
Housing markets work just fine for most people. But certain markets in the Fifth District aren't producing homes and apartments that working families can afford.

It is a pleasure to be with you this morning. The theme of this session is “How Banks Compete.” I want to develop a variation on this theme and consider how the intensity of competition in banking has increased over the years, and some of the challenges this change presents.

Reviews the Bank's operations and includes the article entitled "The Economics of Financial Privacy"

It's a pleasure to be with you tonight. Bryce has welcomed you on behalf of the Powell Endowment.

I'm delighted to be here today to talk with you about the wave of bank mergers that is sweeping across our country-our hometown included.