July 30 – The Federal Reserve Board has approved a final rule establishing risk-management standards for certain financial market utilities designated as systemically important by the Financial Stability Oversight Council. The final rule also establishes requirements for advance notice of proposed material changes to the rules, procedures or operations of certain designated FMUs. FMUs, such as payment systems, central securities depositories, and central counterparties, provide the infrastructure to clear and settle payments and other financial transactions.
Search Results: Risk-Management
July 20 – The Federal Reserve Board has reaffirmed its long-standing policy of applying relevant international risk-management standards to the Federal Reserve Banks’ Fedwire funds and Fedwire securities services. These services play a critical role in the financial system and in facilitating the safe and efficient settlement of private-sector financial market utilities.
Managing risks requires a proactive approach
By Charles Cheatham
A bank’s information security risks include not just regulatory risk, but also financial risk (from unauthorized transactions arising from data breaches), reputation risk (loss of customers’ trust and loss of business), and business continuity risk (system failure, destruction or corruption of data, or unavailability of electronic information because of hackers, disaster, or other business interruptions).
By Kristen Burgess
“Everyone has a plan until they get punched in the mouth.”
This famous quote by heavyweight champion boxer Mike Tyson holds striking relevance to risk management in the present environment. Even some of the most market-savvy, plan-oriented farmers weren’t prepared for the beating that grain prices took in 2014. For those who had the good fortune and insight to lock in forward contracts or hedge some of their grain in the futures markets, the blows haven’t been quite as bad.
By Michael Scheibach
Winston Churchill once said, “It is always wise to look ahead, but difficult to look further than you can see.” Of course, the words of the man who steered Great Britain through the perils of World War II did not portend the current state of the payments industry. But Churchill’s words are quite appropriate for describing the real challenge to grasp where the world of electronic payments is taking the financial services industry.
November 7 – Federal banking agencies found serious deficiencies in underwriting standards and risk management of leveraged loans in a report released recently.
October 17 – The Federal Reserve Board has issued a final rule to modify the regulations for capital planning and stress testing and released instructions for the 2015 capital planning cycle.
Enterprise risk management is a valuable tool to assist institutions in dealing with the uncertainty in our banking environment. An ERM program can facilitate the identification of risk and opportunity while enhancing the capacity to build value. However, audit committees, boards of directors and management often have difficulty identifying a champion to lead and guide implementation and execution of an ERM program. An internal auditor is uniquely positioned to help those charged with governance lead the effort to successfully embrace ERM.
May 20 – The Federal Reserve Board has announced that Credit Suisse will pay a $100 million penalty for unsafe and unsound practices and failure to comply with the federal banking laws governing its activities in the United States. The Federal Reserve also issued a cease and desist order requiring Credit Suisse promptly to address deficiencies in its oversight, management, and controls governing compliance with U.S. laws.