Federal Reserve Board – Federal Reserve Board announces that reputational risk will no longer be a component of examination programs in its supervision of banks

The Federal Reserve Board on Monday announced that reputational risk will no longer be a component of examination programs in its supervision of banks.

The Board has started the process of reviewing and removing references to reputation and reputational risk from its supervisory materials, including examination manuals, and, where appropriate, replacing those references with more specific discussions of financial risk. The Board will train examiners to help ensure this change is implemented consistently across Board-supervised banks and will work with the other federal bank regulatory agencies to promote consistent practices, as necessary.

This change does not alter the Board’s expectation that banks maintain strong risk management to ensure safety and soundness and compliance with law and regulation nor is it intended to impact whether and how Board-supervised banks use the concept of reputational risk in their own risk management practices.

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