OCC examiners to focus 2024 attention on risks that led to bank failures


Bank examiners from the Treasury Department’s Office of the Comptroller of the Currency (OCC) are focusing their supervision attention on how banks manage risks that brought down three mid-sized financial institutions earlier this year.

The OCC’s “Fiscal Year 2024 Bank Supervision Operating Plan,” released Sept. 28, said its risk-based supervision will focus on asset and liability management, specifically interest rate and liquidity risks. OCC supervisors will expect banks to have conducted stress tests across a sufficient range of scenarios, sensitivity analyses of key model assumptions and liquidity sources, and contingency planning.

The OCC will want to understand banks’ plans in the event of a run on deposits, which can weaken a bank’s balance sheet in hours in the age of digital banking and social media. Examiners will want to know a bank has tested its protections against a bank run on numerous scenarios and have adequate contingency borrowing lines and liquidity sources.

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