OCC published a semi-annual report that addresses key risks facing banks in the United States. The spring 2018 report reflects bank data as of March 31, 2018, unless otherwise indicated.
The report focuses on risks that pose threats to the safety and soundness of banks and their compliance with applicable laws and regulations. It presents data in five main areas: the operating environment, bank performance, special topics in emerging risk, trends in key risks, and supervisory actions. The report covers issues that pose threats to the financial institutions regulated by OCC and is intended as a resource for the industry, examiners, and the public. The report highlights the following:
- Competition for quality loans is strong, as examiners note evidence of eased underwriting. The accommodating credit environment warrants a continued focus on underwriting practices to monitor and assess credit risk and lender complacency.
- Operational risk is elevated as banks adapt business models, transform technology and operating processes, and respond to evolving cyber threats.
- Compliance risk is elevated as banks manage money laundering risks and implement changes to policies and procedures to comply with amended Bank Secrecy Act and consumer protection requirements.
- The continued increase in market interest rates may eventually lead to higher funding costs for banks, as economic growth increases loan demand and competition for funding pressures banks to raise deposit yields.
Keywords: Americas, US, Banking, Credit Risk, Concentration Risk, Operational Risk, Compliance Risk, OCC
HKMA proposed amendments to the Supervisory Policy Manual, or SPM, module CA-B-2 on systemically important banks.
FSB published the annual report that examines to-date progress toward implementation of climate-related disclosure recommendations of the industry-led Task Force on Climate-related Financial Disclosures (TCFD).
EBA proposed to revise the guidelines on sound remuneration policies in light of the amendments introduced by the fifth Capital Requirements Directive (CRD V).
US Agencies (FDIC, FED, and OCC) finalized two rules, which are either identical or substantially similar to the interim final rules in effect and issued earlier this year.
EBA published the first monitoring report that examines the issuance and quality of the minimum requirement for own funds and eligible liabilities (MREL) and the total loss-absorbing capacity (TLAC) instruments in EU.
FSB's Task Force on Climate-Related Financial Disclosures (TCFD) is seeking views on the decision-useful, forward-looking climate metrics for firms in financial sector, with the consultation ending on January 27, 2021.
APRA is consulting on the reporting standard for credit risk management (ARS 220.0).
PRA launched a consultation (CP18/20) setting out proposals for the "Contractual Recognition of Bail-in" and "Stay in Resolution" Rules.
BoE and PRA launched a package of proposals on the resolution policy in UK.
ECB published an opinion (CON/2020/25) on the deposit guarantee scheme and other amendments to the financial services legislation.