FDIC published the annual report for 2019. The report highlights that FDIC continued to engage in several community banking and community development initiatives, with cybersecurity remaining as a high priority for FDIC in 2019. The agency worked to strengthen infrastructure resiliency, enhance data governance, help financial institutions mitigate risks, and respond to cyber threats. The FDIC Chair mentioned in the report that, in 2020, FDIC will continue to advance the goals of strengthening the banking system, fostering innovation, and ensuring that banks can meet the needs of businesses and consumers across the nation.
The key topics covered in the report are related to fintech, supervision, risk management and internal control, activities related to large and complex financial institutions, resolution, cybersecurity, and management of credit, liquidity, and interest-rate risks. The report also summarizes the key regulations that were issued during 2019. Additionally, the report mentions that a pending notice of proposed rulemaking is planned for early 2020 to address the outstanding issues related to the prohibitions and restrictions on investments in private equity and hedge funds.
The FDIC Chair highlights that regulators must be proactive in engaging with all stakeholders, including banks, consumer groups, trade associations, and technology companies to understand and help foster the safe adoption of technology across the banking system, especially at community banks. The cost of innovation and regulatory uncertainty are the two primary hurdles that are keeping community banks from developing and utilizing new technologies. Partnerships with financial technology companies, or fintechs, can help community banks overcome the first hurdle but, to overcome the second hurdle, FDIC must ensure that its regulatory framework enables those partnerships. In 2019, FDIC established a new office—the FDIC Tech Lab, or FDiTech—to address these issues.
Related Link: Annual Report
Keywords: Americas, US, Banking, Securities, Annual Report, Credit Risk, Liquidity Risk, Risk Management, Resolution, Enterprise Risk Management, Fintech, FDIC
ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.
ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).
ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.
ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.
EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).
APRA is consulting on updates to ARS 210.0, the reporting standard that sets out requirements for provision of information on liquidity and funding of an authorized deposit-taking institution.
FED released hypothetical scenarios for a second round of stress tests for banks.
FED is proposing to temporarily revise the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes necessary to conduct stressed analysis in connection with the re-submission of capital plans, using data as of June 30, 2020.
FED adopted a proposal to extend for three years, with revision, the information collection under the market risk capital rule (FR 4201; OMB No. 7100-0314).
EBA published a voluntary online survey seeking input from credit institutions on their practices and future plans for Pillar 3 disclosures on the environmental, social, and governance (ESG) risks.