FRB Reports on 2022 Activities and Operations

In an Annual Report to Congress, the Federal Reserve Board ("FRB") reviewed its activities and operations during the 2022 calendar year.

In the Report, the central bank highlighted:

• Financial Stability. The FRB explained how it monitored potential risks to financial stability by conducting stress test scenarios, employing counter-cyclical capital buffers and coordinating efforts with other domestic agencies within the Financial Stability Oversight Council. The FRB also described its engagement with international organizations, such as the Financial Stability Board, to develop "strong global financial-sector policies" by (i) examining liquidity mismatch in open-ended funds, (ii) assessing the risks posed to financial stability by digital assets and decentralized finance, (iii) conducting research on the use of climate vulnerabilities data and (iv) examining the risks of, and changes in, commodities markets.
• Supervision. The FRB focused on supervising the activities of financial institutions by, among other things, conducting examinations and inspections to ensure that financial institutions’ operations were "safe and sound" and in compliance with regulations. The FRB examinations, which were tailored to the size and complexity of financial institutions, consisted of reviewing firms’ risk management systems, financial conditions, governance and controls and compliance. The FRB also said that it established the expectation that financial institutions under FRB supervision determine the legality of engaging in crypto-related activities.
• Payment System. The FRB reviewed its efforts to provide a "comprehensive rule framework" to facilitate funds transfers for its FedNow Service, to allow U.S. banks to provide instant payment to customers "at any hour of the day, every day of the year." The FRB said it finalized 2023 pricing and onboarded pilot participants to test FedNow services.
• Consumer Protection. The FRB reviewed financial institutions’ compliance with state regulations and performance under the Community Reinvestment Act. The FRB said it took steps, in conjunction with state regulators, to clarify examination guidelines and procedures for financial institutions, and completed 370 examinations during the calendar year.