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
Consumer Financial Protection Bureau - CFPB
Bank/Thrift Holding Company Supervision
Deposit Insurance
Mortgage Finance
Municipal Advisors
OCC-OTS Merger
Volcker Rule
Corporate Governance
Financial Stability Oversight Council (FSOC)
Office of Financial Research (OFR)
Systemic Risk
Supervision and Oversight
Payment, Clearing and Settlement
Prudential Supervision
Trust & Securities
Asset-Backed Securities
Resolution Authority

Thursday, May 17, 2012

OCC's Curry Says Operational Risk Now OCC’s Top Concern

Operational risk has eclipsed credit risk as national banks’ chief safety and soundness challenge, Comptroller of the Currency Thomas Curry told the Exchequer Club in Washington, D.C., yesterday.

Operational risk -- the risk of loss due to failures of people, processes, systems and external events -- is “high and increasing,” Curry said. He cited flawed risk models, lack of adequate controls over third-party vendors, and anti-money laundering efficiencies as some examples of operational risk.

“[A]s banks and thrifts face greater resource constraints and higher compliance costs, they may feel greater pressure to economize on systems and processes in order to enhance their income and operating economies … ,” Curry said. “All institutions … must resist the temptation to underinvest in the systems and controls they need to prevent greater risk and larger losses in the future.”

He emphasized that the risk of operational failure is embedded in every activity and product -- from a bank’s processing, accounting and information systems to the implementation of its credit risk management procedures.

“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.”

Read Curry’s speech.

No comments:

Post a Comment

Please read our comment policy before making a comment.