f-h Oni BW & Friends-TTT, Dienstach 20.04.2004

U.S. banks prepared for higher rates, Greenspan says 20.04.2004 20:38    Headlines


   WASHINGTON (AFX) -- The U.S. financial system is "strong and well
positioned" to meet the challenges of higher interest rates, Federal Reserve
Chairman Alan Greenspan said Tuesday.
In testimony on bank regulation at the Senate Banking Committee, Greenspan said
U.S. banks weathered the shocks of the past three years quite well, posting
"high and often record quarterly earnings."
Banks have made the most of the Fed's extremely low interest rates by providing
all kinds of loans to consumers, especially mortgages. But as interest rates
begin to move higher (over an unspecified time period), banks have adapted their
portfolio of assets and business plans to benefit from higher rates, he said.
Greenspan made no comments on the strength of the U.S. economy as a whole or on
monetary policy. Greenspan will testify at the Joint Economic Committee on
Wednesday on the economic outlook.  
The Federal Open Market Committee meets in two weeks to discuss monetary policy.
Analysts expect the Fed's interest rate target to remain at a 46-year low at the
May meeting, but many expect the FOMC to begin raising rates at its June or
August meetings in response to a stronger economy and improved job growth.
Much of Greenspan's testimony was repetition of his well-known views on bank
regulation.
"The system remains strong and well positioned to meet customer needs for credit
and other financial services," he said.
"In general, the industry is adequately managing its interest rate exposure,"
Greenspan said. "Many banks indicate that they now either are interest-rate

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