The impact on U.S. banks from Russia’s invasion of Ukraine has been limited, the Federal Reserve said in a report on Friday.
While some American lenders have started to exit the region, the overall impact on their operations has been moderate, the central bank said in its semiannual Supervision and Regulation Report. Still, the conflict has prompted banks to bolster cyberdefenses, the Fed said.
“U.S. banks’ direct financial exposures to Russia and Ukraine appear limited and manageable,” the Fed said. “Indirect exposure through market volatility, such as the recent volatility in commodities markets, has had limited impact on U.S. banks to date.”
The central bank added that U.S. banks have “substantial liquidity buffers” to fend off losses from the increased volatility.
Meanwhile, U.S. banks overall reported lower delinquency rates for most types of loans in the second half of last year, according to the report. Despite the improvement, late consumer loan payments rose “slightly” in the final three months of 2021.
In the report, the Fed also laid out its supervisory priorities. Those for large banks include:
— Capital, such as risks associated with changes in interest rates.
— Collateral management as it relates to liquidity.
— Compliance with anti-money-laundering program rules.
— Resolution plans.
