The Federal Reserve Board announced on Monday that reputational risk will no longer be part of examination programs in its supervision of banks. The Board has initiated a review to remove references to reputation and reputational risk from supervisory materials, including examination manuals. These references will be replaced with more specific discussions of financial risk where appropriate.
To ensure consistent implementation across Board-supervised banks, examiners will receive training. Additionally, the Board plans to collaborate with other federal bank regulatory agencies to promote uniform practices as needed.
The change does not affect the Board’s expectation for banks to maintain strong risk management to ensure safety, soundness, and compliance with laws and regulations. It is also not intended to influence how Board-supervised banks incorporate reputational risk into their own risk management strategies.
