Watchdog report identifies top challenges faced by FDIC

A report released today by the FDIC Office of Inspector General identified nine challenges the FDIC faces that could affect its capability to promote public confidence and financial stability, adding that the agency has taken concrete steps to address at least some of the challenges.

The OIG flagged the agency’s ability to respond to banking crises as a key challenge, particularly with regard to its role overseeing the orderly liquidation of systemically important entities. The OIG also noted that the FDIC’s readiness and supervisory activities should take into account climate-related financial risks. The agency needs to ensure its examiners have the skillsets and knowledge to conduct IT examinations that adequately identify and mitigate cybersecurity risks at banks and their third-party service providers, OIG said. It should also work with other agencies to supervise the risks posted by digital assets.

Other challenges for the FDIC include fostering financial inclusion for underserved communities; fortifying IT security at the agency; managing changes in the FDIC workforce, with many employees soon to reach retirement age and many examiners recently resigning; improving its collection, analysis and use of data; strengthening agency contracting and supply chain management; and implementing effective governance strategies.