The Federal Reserve removes the "reputational risk" factor from bank regulatory examinations

ChainCatcher News, the Federal Reserve Board (Fed) announced that it will no longer include "reputational risk" as part of its bank regulatory examination program.

The Fed has begun to review and remove references to "reputation" and "reputational risk" from regulatory materials, including the examination manual, and will replace these with more specific discussions of financial risks where appropriate. The Board will train examiners to ensure that this change is consistently implemented across all banks supervised by the Board, and will collaborate with other federal banking regulators as needed to promote consistency in regulatory practices.

This change does not alter the Board's expectation that banks maintain strong risk management to ensure safety and soundness and compliance with laws and regulations, nor does it affect how the Board-regulated banks may use the concept of "reputational risk" in their own risk management practices.