Holding Companies and Compliance
Safety and soundness concerns may have an impact on compliance examinations. The increasingly complex structure of holding companies has drawn regulatory attention to the increased risk to financial institutions by problems in affiliate companies. When Don Powell, Chairman of the FDIC, addressed the Western Independent Bankers Association, he noted the trends in financial conglomerates and the necessity for centralized risk management. In the new view of these entities, regulatory expectations are likely to include comprehensive risk measurement and management systems at a central location. And if the regulators expect the holding companies to do that, the examiners will be approaching examinations with this in mind.
Copyright © 2004 Compliance Action. Originally appeared in Compliance Action, Vol. 9, No. 13, 11/04
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