FDIC Provides Guidance On Credit Management Information Systems

The FDIC provided a list of forward-looking credit metrics that banks should monitor as part of an effective credit management information system ("MIS").

In an article titled "Credit Management Information Systems: A Forward-Looking Approach" published in the Winter 2017 edition of Supervisory Insights, the FDIC emphasized the importance of a strong MIS in maintaining an effective risk management program. Many banks, the FDIC concluded, did not have adequate coverage of forward-looking indicators, which function to signal future performance and can help to identify and mitigate risk exposure. The FDIC expressed the concern that overreliance on performance-based, lagging indicators can make it difficult for management to evaluate risks that may lead to the future deterioration of asset quality. The FDIC provided a chart containing forward-looking credit metrics that banks should monitor as part of their MIS procedures. In addition, the FDIC stressed the necessity of