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Regulators are keeping a close eye on how smaller banks handle commercial lending and regulatory changes stemming from the Dodd-Frank Act, officials from various agencies told attendees at the Risk Management Association's annual conference.
October 19 -
Bank of America has announced several personnel change as part of an organizational shake-up of its global risk management team.
September 1
Community banks must be as mindful of operational risk as their larger brethren.
That was the message delivered at this year's Risk Management Association annual conference by Rick Parsons, who retired in August as an operational risk executive at Bank of America Corp.
"The headlines would suggest that [operational risk] is pretty much a big bank problem," Parson said at a Sunday workshop before dispelling the notion. "Are there not operational risks" for the failure of small and midsize banks, he asked a crowd of 40 bankers.
Parsons pointed to Georgia, where dozens of banks have failed in the past three years, as a "wonderful case study" to examine how smaller banks are exposed to external risks. He said those risks include having too many banks, a focus on real estate lending, a "shaky" deposit base, publicly debated regulatory actions, and a "notion of keeping up" with other banks.
Rather than speak about his more than 30 years at B of A, Parsons asked each banker in the room list their five largest external risks. The top ones from every attendee were added to large sheets of paper, taped across the conference walls. Though bankers had a plethora of concerns, those that were mentioned the most included regulatory changes, cyber supply chain security and an uncertain economy.
In closing, Parsons challenged bankers to ask and address top risks with their managers and directors on a semi-annual basis. He also required that they all read "Only the Paranoid Survive," by Andrew Grove.
