Fed's new risk management guidance

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On January 4th, the Federal Reserve (Fed) proposed for comment guidance for risk management practices at Large Financial Institutions (LFIs). While the Fed has historically considered risk management practices generally in their annual evaluations, the proposed guidance provides greater transparency around specific factors the Fed will consider in determining a bank’s rating as well as whether it is “well managed.” We do not expect the proposal to be controversial, leaving a clear path for the Fed to finalize the guidance this year for use in assigning initial ratings under the LFI rating system in 2018. 

  1. Business line responsibilities at the forefront.
  2. Clearer expectations.
  3. Higher standards for largest banks continue.
  4. Clarity for foreign banks.
  5. Convergence of risk management approaches.

First take

A publication of PwC's financial services regulatory practice

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Julien Courbe

Financial Services Leader, PwC US

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