Federal Government Increasing Scrutiny of Risk Management Practices at Financial Institutions
Michael Cohn of Wolf & Company, P.C. Points to Increasing Focus on Risk Management at the Federal Level as a Key Indicator for Community Banks to Enhance Enterprise Risk Management Capabilities
(firmenpresse) - BOSTON, MA -- (Marketwire) -- 07/25/12 -- Since the massive JP Morgan losses that were attributed to lax risk management practices, federal agencies and regulators have shown signs that they are focusing more on risk and risk management practices at financial institutions. While community-based financial institutions are not compelled at this point to have a risk management program in place, experts agree that this will eventually be mandatory and that smaller institutions should begin practicing enterprise wide risk management today.
Comptroller of the Currency Thomas Curry said in a May 16th speech that the Office of the Comptroller of the Currency now regards operational risk as a source of higher concern than credit risk. Although his unprecedented remarks were aimed at the larger banks with more than $10 billion in assets, he did point out that community-based institutions also face hazards from "insufficient risk management systems."
"There is increasing scrutiny and actions being taken at the federal level relative to the operational risk management practices financial institutions are practicing today," said Michael Cohn, Director of , which provides solutions and services to financial institutions across the country. "While this latest scrutiny is focused on the large national banks, it should serve as a key indicator to community-based financial institutions across the country. If they have not created enterprise risk management programs, they need to start immediately. If they do have an enterprise risk management system in place, community-based financial institutions must be sure it is operating optimally with the proper governance and management structures in place."
, Curry said that operational risk now outweighs credit risk as a major concern for banks and regulators. "Operational risks for institutions of all sizes can arise... from flawed risk assessment and risk management systems in the institution. For community institutions with credit concentrations, a flawed assessment of risk can lead to inadequate controls and insufficient risk management systems." He stressed that banks should not target their risk management programs when looking to cut costs.
"Community banks have led the larger national banks on a number of fronts that allow them to continue lending and contributing to the economic development of their communities without government assistance," said Cohn. "By embracing and practicing ERM effectively, community-based institutions will again be ahead of the large banks. Add the ability for the community based institution to measure the cost of risk management, then they can make it cost less."
WolfPAC Integrated Risk Management, developed by , is an online suite of enterprise risk assessment, management oversight, and risk governance tools that will help financial institutions achieve their business goals by lowering exposure to risk and reducing losses. WolfPAC helps financial institutions achieve their business goals by providing , identify enterprise-wide control gaps, and establish the foundation for a comprehensive risk management program.
WolfPAC Integrated Risk Management® () is a secure, web-based enterprise risk management solution used to automate the identification of risks, threats, and control gaps. Developed by financial professionals in 2004, WolfPAC® provides tools to review and monitor information technology, privacy, vendor, and other enterprise-wide risk assessments. Quarterly methodology updates are designed to align with changing business environments and emerging compliance and examination standards. A robust suite of reports allows management to analyze their control gaps and benchmark risk profiles against peers. WolfPAC keeps institutions safe and sound, and maximizes the outcome of strategic objectives.
AWolf & Company is entering our second century providing assurance, tax, risk management and business consulting services throughout the Northeast. Clients can expect direct involvement from the Firm's owners and senior management, and responsive service from a multi-disciplinary team. Our collaborative service strategy enables us to develop a deep understanding of clients and their business needs, and to maximize opportunities while navigating any potential obstacles.
Wolf's areas of focus include Financial Institutions, Investment Advisors, Family Businesses, Employee Benefit Plans, Educational Institutions, Technology Companies and High Net Worth Individuals. The Firm employs over 175 people, and has offices in Boston and Springfield, MA and Albany, NY. Wolf is registered with and inspected by the PCAOB, and is a member of PKF North America, a national and international affiliation of CPA firms.
CONTACT:
Michael Cohn
Director, WolfPAC Solutions
(617) 439-9700
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Datum: 25.07.2012 - 20:41 Uhr
Sprache: Deutsch
News-ID 168800
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BOSTON, MA
Kategorie:
Commercial & Investment Banking
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