- Source: occ.gov
Treliant has extensive experience in assisting institutions with managing their risk profiles. Our experts assist institutions in identifying their contingent and lower funding sources and testing the ability for the institution to access contingent funding sources, if and when necessary. Our team conducts detailed analyses on a bank’s credit portfolio to determine areas of weakness and identify mitigation strategies and potential hedges for the credit portfolio.
Additionally, our team has extensive experience in conducting reviews of bank third parties, conducting risk assessments, implementing monitoring programs, and reporting to ensure the third party is meeting service level agreements and operating within the bank’s risk appetite given the service they provide. As compliance risk rises, Treliant can provide staffing assistance and reviews of a bank’s CMS to ensure it is appropriately setup to be flexible as the compliance landscape continues to evolve. Treliant can assist institutions by developing scenarios, executing stress tests, and building stress test frameworks to ensure the bank has a process that will evolve as conditions change in the market and business model.
Our experts assist banks in assessing their risk management programs, review risk in portfolios and recommend mitigation strategies, assess controls for operational risk and remediate control deficiencies, and remediate matters requiring attention. We can assist your institution to navigate these challenging times with reasonable, practical solutions that will allow the bank to better manage risk and increase efficiency.
The OCC released its Semiannual Risk Perspective on June 15, 2023. The report provides the OCC’s view on the current risk profile of the banks it supervises and the related banking environment. In its report, the OCC noted that the banking system remained strong despite the liquidity struggles that some banks faced in the first quarter of 2023. The OCC notes that banks should assess their risk management frameworks to confirm the effectiveness of these programs to withstand current and future challenges.
The OCC notes the following highlights:
- Many banks have addressed the liquidity risks coming out of the first quarter but have seen continued challenges given rising rates and investment portfolio depreciation.
- While credit risk has not impacted the banking sector as yet, despite rising rates and persistent high inflation, the OCC sees this risk as increasing across the banking sector.
- There has been an increase in operational risk through the use of third parties and continued cyber threats to the banking system.
- Given the economic and financial challenges and the changes that continue to impact banks, compliance management systems are struggling to keep pace and bank compliance risk is on the rise.
- The current environment requires banks to execute a variety of stress tests, scenario analysis, and planning to support a broad understanding of potential outcomes and risks to earnings and capital.
- Larger banks have developed board and senior management governance frameworks to address climate-related financial risk; but further implementation is varied.
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