By Michael S. Derby
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Europe's ongoing financial crisis is a
"significant threat" to the global banking system, amid signs of
slowing global growth, Federal Reserve Bank of San Francisco President
John Williams said Monday.
In brief remarks opening a conference at his bank, Mr. Williams said
in prepared remarks that "while the global financial system is
stronger than it was three years ago, it remains vulnerable." He
warned the European crisis "could undermine the financial improvements
in North America and Asia."
Mr. Williams is a voting member of the monetary-policy-setting Federal
Open Market Committee. He did not comment on monetary policy, and his
short remarks did not address the U.S. outlook in much detail.
He did, however, flag the tenuous state of the world economy.
"Economic trends in many parts of the world appear to be
deteriorating," Mr. Williams said. "Although growth in the United
States remains moderate, Europe looks to be in recession," he said,
adding "in China, recent indicators point to a marked deceleration in
growth."
Even as he highlighted threats to outlook, Mr. Williams was upbeat
about what efforts to shore up banks have accomplished in the U.S.
"Recent stress tests indicated that, even under a severely adverse
scenario, most of the largest banking companies would have adequate
capital and could continue to lend," he said. The policymaker said the
biggest banks "are stronger in terms of capital and liquidity," amid
improving loan demand.
-Write to Michael S. Derby at michael.derby@dowjones.com
(END) Dow Jones Newswires
June 11, 2012 12:00 ET (16:00 GMT)
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