Dear Reader:
Watch out for those operational risks. The OCC sees bank operational risks as a top safety and soundness supervisory priority. And it’s not just a big bank problem. This week’s Letter also takes a look at the federal regulators’ new guidance on stress-testing, what it means for community banks, and much more.
Pratt's Letter Today
Operational Risk New Top Dog of OCC Supervisory Concerns
Comptroller of the Currency Thomas J. Curry pointed out “an extraordinary” thing during a May 16 speech to the Exchequer Club here in DC. “No issues loom larger today than operational risk in all its dimensions, the manner in which all risks interact, and the importance of managing those risks in an integrated fashion across the entire enterprise,” Curry said. “These themes are a supervisory priority for us at the OCC today and they should similarly command the attention of the industry.”
Note: Although Curry never mentioned the JPMorgan Chase hedging blunder that ... Read More
This Week
Last Word ...
“As Yogi Berra said, ‘Its déjà vu all over again.’ …Risky credit default swaps helped fuel the financial crisis from which we’re still recovering. These dangerous bets led to a financial panic, a recession and a comprehensive restructuring of financial regulation to rein in Wall Street excesses. Dimon and JPMorgan had been among the most vocal opponents of tighter regulations, particularly Volcker Rule restrictions on proprietary trading. Well, so much for that—they’ve just thrown about $2 billion of political capital down the drain.” — ICBA President and CEO Cam Fine in a recent “Finer Points” blog.
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What’s the deal with the CFPB and the states? Are we going to have to face the Feds doing one thing and the states another?
The CFPB and the Conference of State Bank Supervisors (CSBS) started 2011 by signing a key memorandum of understanding (MOU) to establish a foundation of state and federal coordination and cooperation for supervision of providers of consumer financial products and services.
“The new consumer financial agency and the state banking regulators are forging an alliance to protect American families,” said Elizabeth Warren, special advisor to the Secretary of the Treasury on the CFPB (at the time). “This agreement allows us to bring thousands of financial service providers out of the ... Read More
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