The Office of the Comptroller of the Currency (OCC) announced in a press release on Thursday that banks’ inspection on the risk of reputation will no longer be done. It was stated that this application was brought to focus on the risk management processes arising from the activities of banks. The statement points out that the evaluation of the sector according to the negative perception of the sector in the past has ended.
OCC and BANK EVALUATIONS
OCC, with the directive announced on March 7, banks can use their own risk reduction tools, he said. This regulation is for the application of more objective criteria instead of subjective assessments in the examination of banks. In particular, the transactions of the banks will be discussed according to risk management.
Congress, during the Biden administration period to investigate possible discriminatory bank practices. In the listening of the Senate Banking Committee and the Sub -Committee of Financial Services, the problems experienced by the enterprises in the crypto sector in accessing banking services were expressed. Nathan McCauley, CEO of Anchorage Digital, pointed out that even well -managed companies have been disadvantageous by banks.
Banks and crypto
OCC, banks’ internal risk models evaluation process will be made more transparent and objective, while the risk of reputation -based assessments in the past will no longer be used, he said. It is reported that the regulation aims to end the criticism based on subjective perceptions in the banking system.
Authorized names shared their statements.
Rodney E. Hood: “Our review process focuses on ensuring the suitability of banks’ risk management processes.”
Kevin Wysocki from Anchorage Digital said that the abolition of the reputation risk will contribute to the more fair evaluation of the sector.
Following FTX’s November 2022 bankruptcy, regulatory institutions drew attention to the increasing risks in the crypto sector. Institutions such as Federal Reserve Board and Federal Deposit Insurance Corporation said that they have the opportunity to intervene by closely monitoring the risk elements of banks. These steps are seen as part of the efforts to protect stability in the banking system. At the same time, we see that the efforts to force banks to stay away from the crypto finally disappeared with the new administration.
The OCC’s new application is interpreted as a step towards adopting objective criteria in the evaluation of banks. Together with the regulation, it is aimed to improve the risk management strategies of banks and to increase transparency. The expectation of equality and fair access in the sector is the main purpose of the new regulation. After the FTX collapse, many crypto companies had difficulty finding a bank to work.
Responsibility Rejection: The information contained in this article does not contain investment advice. Investors should be aware that crypto currencies carry high volatility and thus risk and carry out their operations in line with their own research.
