Tabs

Bank/Thrift Supervision   |    Capital    |    CFPB    |    Deposit Insurance    |    Interchange    |    Mortgage Finance
Municipal Advisors   |    OCC-OTS Merger   |    Preemption    |    QM - QRM    |    Swaps   |    Volcker Rule    |    Full Topics List
 
Qualified Mortgage - Qualified Residential Mortgage
Swaps
Consumer Financial Protection Bureau - CFPB
Bank/Thrift Holding Company Supervision
Capital
Deposit Insurance
Interchange
Mortgage Finance
Municipal Advisors
OCC-OTS Merger
Preemption
Volcker Rule
Corporate Governance
Financial Stability Oversight Council (FSOC)
Appraisals
Office of Financial Research (OFR)
Systemic Risk
Supervision and Oversight
Payment, Clearing and Settlement
Prudential Supervision
Trust & Securities
Asset-Backed Securities
Resolution Authority

Monday, April 30, 2012

ABA Study on Improving Bank Exam Process

ABA on Friday released a study that provides a framework for policymakers to restore the bank supervision and examination process’s mission of strengthening the banking system and enhancing banks’ ability to serve their customers.

“Efforts to divide the banking industry between ‘big’ and ‘small’ … missed the point and [won’t] solve the bad fit of regulations for a banking system far more diversified than a simplistic division in two,” according to the white paper, “Value-Added Bank Supervision: A Framework for Safely Fostering Economic Growth.”

The study’s authors -- noted economist and lawyer Robert Litan and former Comptroller of the Currency Jerry Hawke -- surveyed executives at more than 90 ABA member banks of all sizes. They found that 73% believe exams added value before the financial crisis, but only 45% believe that’s true since the crisis. “Even more startling is the increase in bankers who see the examination as being counterproductive, jumping from just 3% before the crisis to 34% after it,” the study said.

Litan and Hawke recommended improvements to the bank exam process that focus on customized supervision; a risk-based, big-picture approach to safety and soundness; clearer capital requirements; a stress-testing option; experienced examiner leadership; cooperation between state and federal examiners; and feedback from experienced examiners.

Read the study.
Read the study’s executive summary.

1 comment:

Vikrama Dhiman said...
This comment has been removed by a blog administrator.

Post a Comment

Please read our comment policy before making a comment.