ABA Banking Journal
No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
SUBSCRIBE
ABA Banking Journal
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
No Result
View All Result
No Result
View All Result
ADVERTISEMENT
Home Compliance and Risk

OCC: Operational, Strategic Risk Elevated; Banks Remain Resilient

December 6, 2021
Reading Time: 2 mins read

In its Semiannual Risk Perspective Report, the OCC yesterday flagged operational risk and strategic risk as being elevated, with banks continuing to face increasingly sophisticated cyberattacks and take strategic risks in order to improve earnings in the current economic environment. The OCC noted that “banks are showing resilience in the current environment, with satisfactory credit quality and strong earnings, but weak loan demand and low net interest margins continue to weigh on performance.”

In addition, the OCC noted that compliance risk also remains heightened as COVID-19 relief programs wind down. “The conclusion of these programs creates increased compliance responsibilities, high transaction volumes, and new types of fraud, as banks continue to respond to a changing operating environment,” the OCC said. Meanwhile, credit risk remains “moderate,” and “loan portfolios have been resilient and widespread credit deterioration has not materialized from the [COVID-19] crisis due to appropriate risk management by banks,” the report said.

Turning to community banks in particular, the OCC found that some firms have “assumed increased credit and interest rate risk consistent with their operating strategies,” and emphasized the need for these institutions to “ensure financial resilience, without compromising sound business models and strategic plans, to avoid excessive risk taking, and to maintain adequate controls when managing investment and lending programs and third-party relationships.”

Additional challenges facing community banks include strategic risk—particularly with regard to effective strategic planning, talent acquisition and retention and succession planning.

The OCC also outlined its plans to address climate-related risks that affect the banking sector. As part of this initiative, the agency said that in 2022, it will finalize the previously announced climate risk management framework for large banks and will “develop more detailed expectations by risk area.”

The agency intends to publish for comment climate risk management principles for large banks that will build on the principles issued by the Basel Committee’s Task Force on Climate-Related Financial Risks. “The principles are intended to help direct the focus of institutions on the foundational questions to determine the materiality of climate risk and establishing a risk management framework. The principles will also provide a basis for development of more complex, mature, climate risk management expectations.”

In addition, the OCC said it would review large firms’ progress toward establishing climate risk management capabilities and conduct additional industry outreach, and that it would provide another update on the climate risk initiative in the Spring 2022 Semiannual Risk Perspective report.

ADVERTISEMENT
Tags: Community bankingCOVID-19Credit riskEnterprise risk managementRisk and ComplianceRisk managementThird-party risk
ShareTweetPin

Related Posts

CFPB releases mortgage servicing proposal, overhauls loss mitigation framework

ABA, associations seek clarity about Fannie, Freddie credit scoring change

Mortgage
July 11, 2025

The recent announcement that Fannie Mae and Freddie Mac will expand credit scoring options for mortgages is a promising first step in creating a scoring system to better serve creditworthy Americans, but there remain several questions about how...

ABA Data Bank: Commodity inflation makes Fed’s job harder

ABA DataBank: Copper prices rise on tariff announcement

Economy
July 11, 2025

With the Trump administration announcing a 50% tariff on copper imports starting August 1, copper futures prices surged in response.

ABA donates to Texas flood relief efforts, urges bankers to contribute

FDIC issues regulatory relief guidance for Texas

Compliance and Risk
July 11, 2025

The FDIC released guidance with steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Texas recently affected by severe storms and flooding.

BIS drafts guidance for central banks on AI adoption

BIS releases report on connections between banks and nonbanks

Compliance and Risk
July 11, 2025

Differences between regulations for banks and those for nonbank financial intermediaries may have created incentives to shift business activities to the NBFI sector, so bank supervisors should apply “close scrutiny” to such interactions, according to the report.

Regulators take issue with discrimination definition in proposed appraisal standards

HUD reverses Biden-era policies on appraisal review

Compliance and Risk
July 11, 2025

HUD eliminated several of the core policies adopted by the Property Appraisal and Valuation Equity task force, an interagency group of 13 federal agencies formed during the Biden administration to address alleged discrimination in the appraisal process.

ABA donates to Texas flood relief efforts, urges bankers to contribute

ABA donates to Texas flood relief efforts, urges bankers to contribute

Community Banking
July 10, 2025

ABA will donate $10,000 to Texas Bankers Foundation to assist with immediate disaster response and recovery following the recent catastrophic flooding in Central Texas.

NEWSBYTES

ABA, associations seek clarity about Fannie, Freddie credit scoring change

July 11, 2025

ABA DataBank: Copper prices rise on tariff announcement

July 11, 2025

FDIC issues regulatory relief guidance for Texas

July 11, 2025

SPONSORED CONTENT

Navigating Disruption in Ag Lending – Why Tariffs Are Just the Tip of the Iceberg

Navigating Disruption in Ag Lending – Why Tariffs Are Just the Tip of the Iceberg

July 1, 2025
AI Compliance and Regulation: What Financial Institutions Need to Know

Unlocking Deposit Growth: How Financial Institutions Can Activate Data for Precision Cross-Sell

June 1, 2025
Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

April 25, 2025
Outsourcing: Getting to Go/No-Go

Outsourcing: Getting to Go/No-Go

April 5, 2025

PODCASTS

Breaking down the bank-related provisions in the big budget bill

July 10, 2025

Podcast: Inside ABA’s new Treasury Check Verification System API

June 25, 2025

Podcast: Staying close to clients amid tariff-driven volatility

June 18, 2025
ADVERTISEMENT

American Bankers Association
1333 New Hampshire Ave NW
Washington, DC 20036
1-800-BANKERS (800-226-5377)
www.aba.com
About ABA
Privacy Policy
Contact ABA

ABA Banking Journal
About ABA Banking Journal
Media Kit
Advertising
Subscribe

© 2025 American Bankers Association. All rights reserved.

No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive

© 2025 American Bankers Association. All rights reserved.