The FED announced that it will no longer take "reputational risk" criteria into account in bank audits.
In a statement made just minutes ago today, it was noted that references to reputational risk in the audit materials have begun to be reviewed and that these expressions will be replaced with more concrete financial risk assessments if deemed appropriate.
The FED stated that this change does not alter the expectation of banks to implement strong risk management practices, saying, "This change does not eliminate the FED's expectation for banks to maintain strong risk management practices to ensure their safety and soundness."
Federal Reserve Chairman Jerome Powell promised in a statement made in February that phrases allowing regulators to monitor banks' "controversial comments or activities" would be removed.
You can access the official press release of the FED here.
This step may be welcomed by some industry representatives and Republican politicians who oppose the practice, which has long been seen as "too broad" and "unfair" as an auditing criterion. It was claimed that the practice in question led to regulators pressuring banks that deal with politically sensitive clients or cryptocurrency companies, even in cases where these clients do not pose a direct threat to the bank's safety.
Similarly, the Federal Deposit Insurance Corporation (FDIC) stated in a letter sent to Congress in March that it plans to completely "eliminate" reputational risk in its regulatory approach. Another regulatory agency, the Office of the Comptroller of the Currency (OCC), had announced earlier this year that it would remove this term from its supervisory guidance.
*This is not investment advice.
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Everyone focused on the US and Iran, but the FED quietly implemented developments in favor of a bullish trend for Cryptocurrencies!
The FED announced that it will no longer take "reputational risk" criteria into account in bank audits.
In a statement made just minutes ago today, it was noted that references to reputational risk in the audit materials have begun to be reviewed and that these expressions will be replaced with more concrete financial risk assessments if deemed appropriate.
The FED stated that this change does not alter the expectation of banks to implement strong risk management practices, saying, "This change does not eliminate the FED's expectation for banks to maintain strong risk management practices to ensure their safety and soundness."
Federal Reserve Chairman Jerome Powell promised in a statement made in February that phrases allowing regulators to monitor banks' "controversial comments or activities" would be removed.
You can access the official press release of the FED here.
This step may be welcomed by some industry representatives and Republican politicians who oppose the practice, which has long been seen as "too broad" and "unfair" as an auditing criterion. It was claimed that the practice in question led to regulators pressuring banks that deal with politically sensitive clients or cryptocurrency companies, even in cases where these clients do not pose a direct threat to the bank's safety.
Similarly, the Federal Deposit Insurance Corporation (FDIC) stated in a letter sent to Congress in March that it plans to completely "eliminate" reputational risk in its regulatory approach. Another regulatory agency, the Office of the Comptroller of the Currency (OCC), had announced earlier this year that it would remove this term from its supervisory guidance.
*This is not investment advice.
Follow our Telegram group, Twitter account, and Youtube channel for exclusive news, analyses, and on-chain data! Also, start live price tracking immediately by downloading our Android and IOS Apps!