Supervisory Insights is published by the FDIC's Division of Risk Management Supervision to promote sound principles and practices for bank supervision.
The Summer 2018 issue of Supervisory Insights features two articles of interest to examiners, bankers, and supervisors. The first article, "Oil Price Volatility and Bank Performance: A View from the Supervisory Process," provides an overview of the specialized business of lending to the oil and gas (O&G) sector. The steep drop in oil prices beginning in 2014 tested the risk-management practices of insured banks active in O&G lending and other banks operating in geographic areas that depend on the O&G industry. This article shares FDIC observations from its surveillance efforts and supervisory activities relative to these institutions.
The information and analysis presented in the article "Credit Risk Grading Systems: Observations from a Horizontal Assessment" are drawn from examiner observations about the loan risk-rating systems at selected large state nonmember banks. This article illustrates how strong credit grading systems incorporate clearly identifiable processes and establish a sound governance framework.
This issue also includes the Regulatory and Supervisory Roundup, an overview of recently released regulations and other items of interest.
Comments about this issue and suggestions for topics for future issues can be sent to SupervisoryJournal@fdic.gov or to Managing Editor Kim Lowry at firstname.lastname@example.org. We look forward to hearing from you.