safety and soundness standards

Safety and soundness standards are regulations that ensure financial institutions, like banks, operate responsibly and remain stable. They require these institutions to maintain sufficient reserves, manage risks carefully, and have strong governance. The goal is to prevent failures that could lead to financial crises, protect depositors’ money, and keep the overall financial system secure. Essentially, these standards help ensure banks are financially healthy and can withstand economic stresses, fostering trust and stability in the economy.