Our IT Security Specialist Chris Griesemer’s recent presentation at the Lunch’Learn – Technical Audits, Security and Best Practices in Finance and Banking seminar covered important points for financial institutions.
We have been doing IT exams for more than ten years and one overriding area of concern we see constantly is customer privacy. This has become one of the hottest topics with examiners lately. The examiners have a tendency to tell you to do something without giving any guidance. You will not receive an explanation on how to achieve their goals and sometimes they don’t even explain why.
Customer information is one example. Why does it need to be so secure? This question has a lot of answers, but this article will focus on the internal risks.
As a consultant to community banks, I was excited when Glass-Steagall was repealed in 1999. I saw it as an opportunity for community banks to offer additional services to their current customers and to find additional revenue sources to build value for their owners. What I didn’t see was how the large banks would be able to leverage FDIC insured deposits to make risky investments in CDO’s and CMO’s that would ultimately lead to the financial meltdown nine years later.
Deferred tax assets on a bank’s balance sheets have always been a problem for regulators. Most of the deferred tax assets are currently disallowed for capital purposes. And now with banks piling up losses and creating deferred tax assets due to net operating loss carryovers regulators are taking a harder look at these assets. Writedowns of these assets are expected and will more likely hurt regional and community banks.
As a member of PKF, an association of almost 100 legally independently accounting and consulting practices with offices throughout North America, we have access to all of First Research’s quarterly updates for many different industries. Here is the most recent update for banks and credit unions: First Research Banks and Credit Unions Quarterly Update.
Nothing ever changes. Thomas Jefferson was criticizing big banks at the beginning of our history…
From the Daily Bail, a website devoted to bailout news, opinion and analysis:
Can We Party like it’s 1776 and Just Start Over? Thomas Jefferson’s Top 10 Quotes on Money and Banking
In addition to those detailed in our article, Commercial Lending…After The Crisis: Back To Basics,
here are two more hard lessons learned from the financial crisis:
Now that we have digested the fact that most banks’ loan portfolios are weaker today than they were two years ago, it’s a good time to review a few of the basics of commercial lending.
I found this list of problem banks published by www.calculatedriskblog.com. This list is sortable and even includes the type of Enforcement Action, the reason and the agency.
The American Bankers Association (ABA) and most bankers believe that the creation of a new regulatory agency to oversee consumer protection is a bad idea. The ABA on it’s website is “asking all bankers to contact their Members of Congress to let them know that creating creating a new consumer agency is not the solution. It would only complicate our existing regulatory structure by adding another layer of bureacuracy with no guarantee of better consumer protection.”
