The U.S. banking industry has found greater stability following bank failures in March and April 2023, and we expect most banks to perform well and build capital in 2024. Still, potential further declines in deposits, funding cost pressures, unrealized losses, commercial real estate exposures, and economic uncertainty remain key risks. Regulators last year proposed important changes to capital and resolution requirements. They could finalize those in 2024, perhaps with some alterations. They also may propose further updates to supervision and regulation in response to last year’s failures.