{"id":125806,"date":"2025-03-25T22:17:13","date_gmt":"2025-03-25T22:17:13","guid":{"rendered":"http:\/\/cryptospotters.net\/?p=125806"},"modified":"2025-03-25T22:17:13","modified_gmt":"2025-03-25T22:17:13","slug":"fdic-moves-to-eradicate-reputational-risk-category-from-bank-exams","status":"publish","type":"post","link":"http:\/\/cryptospotters.net\/?p=125806","title":{"rendered":"FDIC moves to eradicate &#039;reputational risk&#039; category from bank exams"},"content":{"rendered":"<p>Source: Cointelegraph.com NewsThe US Federal Deposit Insurance Corporation, an independent agency of the federal government, is reportedly moving to stop using the \u201creputational risk\u201d category as a way to supervise banks.<br \/>\nAccording to a letter sent by the agency\u2019s acting chairman, Travis Hill, to Rep. Dan Meuser on March 24, banking regulators should not use \u201creputational risk\u201d to scrutinize firms.<br \/>\n\u201cWhile a bank\u2019s reputation is critically important, most activities that could threaten a bank\u2019s reputation do so through traditional risk channels (e.g., credit risk, market risk, etc.) that supervisors already focus on,\u201d notes the letter, first reported by Politico.<br \/>\nAccording to the document, the FDIC has completed a \u201creview of all mentions of reputational risk\u201d in its regulations and policy documents and has \u201cplans to eradicate this concept from our regulatory approach.\u201d<br \/>\nReputational risk and debanking<br \/>\nThe Federal Reserve defines reputational risk as \u201cthe potential that negative publicity regarding an institution\u2019s business practices, whether true or not, will cause a decline in the customer base, costly litigation, or revenue reductions.\u201d<br \/>\nThe FIDC letter specifically mentioned digital assets, with Hill noting that the agency has generally been \u201cclosed for business\u201d for institutions interested in blockchain or distributed ledger technology. Now, as per the document, the FDIC is working on a new direction for digital asset policy aiming at providing banks a way to engage with digital assets.<br \/>\nThe letter was sent in response to a February communication from Meuser and other lawmakers with recommendations for digital asset rules and ways to prevent debanking.<br \/>\nIndustries deemed as \u201crisky\u201d to banks often face significant challenges in establishing or maintaining banking relationships. The crypto industry faced such challenges during what became known as Operation Chokepoint 2.0.<br \/>\nThe unofficial Operation led to more than 30 technology and cryptocurrency companies being denied banking services in the US after the collapse of crypto-friendly banks earlier in 2023.<br \/>\nRelated: FDIC resists transparency on Operation Chokepoint 2.0 \u2014 Coinbase CLO<a href=\"https:\/\/cointelegraph.com\/news\/fdic-moves-eradicate-reputational-risk-category-bank-exams?utm_source=rss_feed&amp;utm_medium=rss&amp;utm_campaign=rss_partner_inbound\" target=\"_blank\" class=\"feedzy-rss-link-icon\" rel=\"noopener\">Read More<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>Source: Cointelegraph.com NewsThe US Federal Deposit Insurance Corporation, an independent agency of the federal government, is reportedly moving to stop using the \u201creputational risk\u201d category as a way to supervise&hellip; <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[],"_links":{"self":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/125806"}],"collection":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=125806"}],"version-history":[{"count":0,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/125806\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=125806"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=125806"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=125806"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}