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ARTICLE · 21 DECEMBER 2023

OCC Report Identifies Key Risks Facing Federal Banking System

Goodwin Procter LLP
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On December 7, the OCC's National Risk Committee released its semiannual risk perspective report (the Report), commenting on the condition of the federal banking system...

United StatesFinance and Banking
Nicole Griffin
Nicole Griffin
Samantha Kirby
Samantha Kirby
William McCurdy
William McCurdy
Ben See
Ben See
Kelly Phipps
Kelly Phipps

Regulatory Developments

OCC Report Identifies Key Risks Facing Federal Banking System

On December 7, the OCC's National Risk Committee released its semiannual risk perspective report (the Report), commenting on the condition of the federal banking system and identifying key risks. The data in the Report is largely as of June 30, 2023 and is meant to address issues and risk that pose threats to all financial institutions regulated by the OCC.

The Report identified key risk themes: (1) credit risk is increasing due to higher interest rates, and borrower stress across asset classes is starting to become apparent; (2) the effects of rising deposit and interest rates are negatively impacting investment portfolio values; (3) operational risks are rising, largely related to cyber threats and fraud, innovative products and services offerings, and increasing digitalization efforts; and (4) compliance risks remain high. Further, the Report identified artificial

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