Featured Product

    US Agencies Publish Examiner Guide to Assess Institutions Amid Crisis

    June 23, 2020

    US Agencies (FDIC, FED, NCUA, and OCC), in conjunction with the state bank and credit union regulators, issued examiner guidance to promote consistency and flexibility in the supervision and examination of financial institutions affected by COVID-19 pandemic. In assessing an institution under the principles in the guidance, examiners will consider the institution’s asset size, complexity, risk profile, and the industry and business focus of its customers. In conducting their supervisory assessment, examiners will consider whether institution management has managed risk appropriately, including taking appropriate actions in response to stresses caused by the COVID-19 pandemic.

    The interagency guidance highlights that examiners should evaluate management’s initial and ongoing assessment of the risk that the pandemic presents to the institution. Examiners should determine whether management’s assessment of credit risk reasonably reflects the institution’s asset quality, given the prevailing economic conditions in its business markets. In addition to determining the effect on asset quality, examiners should assess management’s understanding of the pandemic’s effects on the institution’s earnings prospects and capital adequacy as well as its effect on funding, liquidity, operations, and sensitivity to market risk. The risks associated with the COVID-19 pandemic, as well as impact of policy responses, can be challenging to assess in real time. Examiners will assess an institution’s risk identification and reporting processes, given the level of information available and the stage of local economic recovery. The quality of an institution’s risk assessments will be considered, as appropriate, in the examiner’s assessment of supervisory ratings. 

    The guidance also specifies that, to promote consistency and transparency across the agencies, examiners will continue to assign supervisory ratings in accordance with the applicable rating system, including the Uniform Financial Institutions Rating System (CAMELS rating) and the interagency Rating System for U.S. Branches and Agencies of Foreign Banking Organizations (ROCA rating). Similarly, FED examiners will apply the principles outlined in the document in assigning supervisory ratings to bank holding companies, U.S. intermediate holding companies, and savings and loan holding companies using the RFI/C(D) rating system or Large Financial Institution (LFI) rating system, as applicable, and to the U.S. operations of foreign banking organizations. When assigning the composite and component ratings, examiners will review management’s assessment of risks presented by the pandemic.

     

    Related Links

    Keywords: Americas, US, Banking, COVID-19, Regulatory Capital, Credit Risk, Market Risk, CAMELS Rating, RFI Rating System, LFI Rating System, Guidance, US Agencies

    Featured Experts
    Related Articles
    News

    APRA Updates Validation and Derivation Rules in September 2020

    APRA updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities.

    September 24, 2020 WebPage Regulatory News
    News

    EC Proposes Frameworks for Crypto-Assets and Operational Resilience

    EC adopted a package that includes the digital finance and retail payments strategies and the legislative proposals for regulatory frameworks on crypto-assets and digital operational resilience.

    September 24, 2020 WebPage Regulatory News
    News

    ECB Publishes Opinion on Proposals to Amend Securitization Framework

    ECB published an opinion (CON/2020/22) on proposals for regulations amending the securitization framework of EU, in response to the COVID-19 pandemic.

    September 24, 2020 WebPage Regulatory News
    News

    FCA Consults on Regulation of International Firms in UK

    FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.

    September 23, 2020 WebPage Regulatory News
    News

    MAS Amends Notice on Capital Adequacy Requirements of Banks

    MAS published amendments to Notice 637 on the risk-based capital adequacy requirements for reporting banks incorporated in Singapore.

    September 23, 2020 WebPage Regulatory News
    News

    FCA to Begin to Move Firms to New Data Collection Platform RegData

    FCA announced that it will move firms to RegData from Gabriel in the coming months in stages, based on the reporting requirements of firms.

    September 23, 2020 WebPage Regulatory News
    News

    ISDA Expects IBOR Fallbacks to be Effective by End of January 2021

    ISDA issued a letter to regulators to flag that it now expects the supplement to the 2006 ISDA Definitions and the Interbank Offered Rate (IBOR) Fallbacks Protocol to be effective around mid- to late-January 2021.

    September 23, 2020 WebPage Regulatory News
    News

    APRA Reviews Repayment Deferral Plans, Identifies Best Practices

    APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.

    September 22, 2020 WebPage Regulatory News
    News

    ESAs Assess Risks to Financial Sector After COVID-19 Outbreak

    ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.

    September 22, 2020 WebPage Regulatory News
    News

    BoE Confirms Withdrawal of COVID Corporate Financing Facility

    BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.

    September 22, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5836