Is a stricter set of regulatory expectations for risk governance long overdue?
The Comptroller of the Currency recently issued a proposed set of minimum standards for the risk management practices of national banks, and I think they provide the most definitive statement on the regulatory expectation for bank boards in the risk governance process that I have ever seen.
The proposed requirements were originally mandated by the Dodd-Frank Act of 2010, and would apply only to national banks with $50 billion in assets or greater that are supervised by the OCC – which is to say those institutions that pose the greatest systemic risk to the banking system and to the economy. But I think that smaller banks – certainly down to the $10 billion asset level, and perhaps even lower — should pay close attention to whatever rule is eventually issued because a slimmed down version could eventually apply to them as well.
Make no mistake, the OCC expects the board…
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