Risk management

Regulators should be paying more attention to the ballooning galaxy of nonbank financial institutions currently operating in global markets. The risks they pose to the financial system are not well understood.

We could be on the cusp of serious economic instability. Smart bankers should take the time to do a deep dive into the risk profile of their customers, and identify potential trouble spots.

The Federal Reserve and Office of the Comptroller of the Currency terminated enforcement orders against Industry Bancshares and its subsidiaries. The banks were considered prime examples of interest rate risk management gone awry.

As we enter one of the banking industry's most extreme cycles of deregulation, we should remember it doesn't always work, especially when supervisory police are reduced and consumer protection guardrails are removed, resulting in a high-speed lane for risk-taking banks and nonbanks.

The voluminous resolution plans banks are required to submit to regulators are often set aside in the case of actual bank failures. There are far more efficient ways to ensure orderly bank resolutions.

A number of fintechs emerged amid the COVID-19 pandemic as a flurry of Paycheck Protection Program loan applications inundated banks. Now, the government is alleging many of them facilitated or committed fraud.

The Federal Reserve is the latest bank regulator to purge reputational considerations from its supervisory materials.

The Office of the Comptroller of the Currency's decision to remove reputational risk from banks supervision plans means that one of examiners' most effective tools has been stripped away.

It is past time to rethink how we treat banking organizations in trouble. It is time we work to support institutions in trouble wherever possible, rather than simply punishing the institutions and the public.