WASHINGTON (Sputnik) — Government regulators told the GAO they had improved their ability to identify and respond to emerging risks by introducing closer tracking of bank compliance with examination recommendations to address emerging problems.
“[F]ederal losses and… bank failures… over the past 35 years — including the 1980s thrift and commercial bank crises and the 2007-2009 financial crisis… resulted in estimated costs to federal bank and thrift insurance funds over $165 billion.”
The GAO said the banking crises had confirmed the need for early and forceful action by government bank regulators.
“The 2007-2009 financial crisis demonstrated that risks to bank safety and soundness could not be assessed by looking only at the performance and activities of individual banks or groups of banks. Rather, regulators must look across the financial system to identify emerging risks.”
The GAO said it had created a two-part framework, or guide that applied these lessons for regulators “to identify and respond to emerging risks to the banking system.”
The framework monitors regulatory responses to emerging risks, the report added.