Annual Report 2008| Federal Reserve Bank of St. Louis

Central to fostering a sound financial system

Clearly, the past year was not an easy one for bankers. Many banks struggled, and some failed, as the economy deteriorated into a recession. For the most part, though, the downturn did not hit Eighth District banks as hard as it hit some banks in other districts.

Attentive bank examinations help ensure a safe and efficient banking system, one of the most important elements of a strong economy. Examiners assess the soundness of a bank’s assets and operations and the effectiveness of its risk management practices. Examiners also review a bank’s compliance with consumer protection laws. Included in these reviews is an evaluation of fair lending (anti-discrimination) practices and performance under the Community Reinvestment Act in meeting the credit needs of the community—including low- and moderate-income neighborhoods—consistent with safe and sound operation of the institution. By studying financial developments and other trends, examiners can identify emerging financial soundness and consumer compliance risks and policy issues.

Processing a bank’s request for acquisitions and new activities is another important function of a regional Reserve bank, as is the collection and verification of data from the financial institution. The Statistics function ensures an accurate accounting of the institution’s condition. In addition, data are used to construct and interpret monetary aggregates and reserve measures, evaluate the safety and soundness of the U.S. financial system, and determine compliance with various regulations and restrictions.

Finally, the St. Louis Fed does its part to ensure adequate liquidity in financial markets by making loans through the discount window and allowing the prudent use of intra-day credit.


The St. Louis Fed examined 38 percent more banks in 2008 than it did 10 years ago. St. Louis is one of just two Fed banks, along with Kansas City, to gain in numbers over that time.


  • Supervising 98 state member banks at year-end. The net gain in 2008 was three, with six members added and three members lost through mergers.

  • Participating in more than 110 outreach events targeted at bankers, regulators and public audiences. Presentations were given at about 90 percent of these events.

  • Creating Ask the Fed, a call-in program that allows District bankers to pose questions to supervisory officials in St. Louis.

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