Federal Reserve Bank of Dallas President Richard Fisher said Texas banks are more profitable than their counterparts in other states and suggested that a benchmark for financial distress known as the Texas ratio be renamed the Georgia ratio for the state with the most troubled banks.
“Just as we have outpaced others in job creation, our banking industry has outperformed the nation,” Fisher said today in remarks prepared for the Texas Bankers Association meeting in Fort Worth. “But what’s most notable is that this marks the fifth consecutive year that Texas banks have done better than their counterparts nationwide in terms of profitability.”
Texas banks have had higher profit, lower loan losses and few institutions near failure since the 2008 financial crisis, Fisher said. The Dallas Fed on May 1 laid out a plan calling for new limits on taxpayer aid to failing financial firms, including the removal of chief executives and the voiding of bonus contracts.
Fewer than 1 percent of Texas banks have a Texas ratio exceeding 100 percent, compared with 4.6 percent nationwide and 24 percent in Georgia, Fisher said. The ratio compares delinquent loans and real estate to tangible bank capital and the allowance for loan losses.
Fisher, 63, didn’t comment on the U.S. economy or monetary policy in his prepared remarks. He has been president of the Dallas Fed since 2005. His district includes Texas, northern Louisiana and southern New Mexico.
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