The OCC announced several changes to its large bank examination process in response to a peer review by bank supervisors from Australia, Canada and Singapore.
The agency will expand the lead expert team of specialists to improve perspective and analysis across supervised teams, while correspondingly reducing the number of on-site examiners. It will also rotate examiners every five years in cities that are home to more than one large bank.
The OCC intends to formalize an enterprise risk management framework, which will involve a risk appetite statement and decision tree to give examiners a consistent understanding of acceptable risk, and it will revisit CAMELS ratings in order to provide clearer guidance to 2-rated institutions when they are deteriorating. The agency also agreed with the peer reviewers’ recommendation to work harder at retaining experienced examiners, which ABA has also recommended regulators do.