FDIC examiners recently have observed liquidity stress at a small number of banks. Although these have been isolated instances, they illustrate the importance of liquidity risk management as many institutions continue to reduce holdings of liquid assets. Bank management should be cognizant of potential funding issues that can arise in stress situations as they develop or revise contingency funding plans. The article reiterates principles outlined in existing supervisory guidance and is intended as a resource for bankers who wish to heighten awareness of prudent liquidity and funds management.
The information collected through Bank Secrecy Act/Anti-Money Laundering (BSA/AML) programs is critical to the United States government’s counter terrorist financing initiatives and other longstanding efforts to protect the financial system from illicit finance. The FDIC carefully evaluates a depository institution’s compliance with the recordkeeping and reporting requirements of the BSA and implementing AML regulations. The focus of the BSA/AML examination is to assess whether the depository institution has established appropriate policies, procedures, and processes consistent with the institution’s BSA/AML risk. The article reports that the vast majority of BSA/AML compliance deficiencies identified by the FDIC are resolved through the supervisory process without the need for an enforcement action. The article also provides examples of rare, but significant, failures in BSA/AML compliance programs.
This feature provides an overview of recently released regulations and other items of interest.
Supervisory Insights is published by the Division of Supervision and Consumer Protection of the Federal Deposit Insurance Corporation to promote sound principles and best practices for bank supervision.
Martin J. Gruenberg
Doreen R. Eberley
Director, Division of Risk Management Supervision
Journal Executive Board
Division of Risk Management
George E. French, Deputy Director and Executive Editor
James C. Watkins, Senior Deputy Director
Martin D. Henning, Deputy Director
Maureen E. Sweeney, Deputy Director
Division of Depositor and Consumer
Sylvia H. Plunkett, Senior Deputy Director
Jonathan N. Miller, Deputy Director
Michael J. Dean. Atlanta Region
Kristie K. Elmquist, Dallas Region
John R. Jilovec, Acting Regional Director, Kansas City Region
James D. LaPierre, Acting Regional Director, Chicago Region
Kathy L. Moe, San Francisco Region
John F. Vogel, New York Region
Kim E. Lowry
Amanda M. Lee
Michael T. Register
Supervisory Insights is available online by visiting the FDIC’s website at www.fdic.gov. To provide comments or suggestions for future articles, to request permission to reprint individual articles, or to request print copies, send an e-mail to SupervisoryJournal@fdic.gov.
The views expressed in Supervisory Insights are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance Corporation. In particular, articles should not be construed as definitive regulatory or supervisory guidance. Some of the information used in the preparation of this publication was obtained from publicly available sources that are considered reliable. However, the use of this information does not constitute an endorsement of its accuracy by the Federal Deposit Insurance Corporation.