Operational resilience standards for critical operations at banks will be the subject of a forthcoming advance notice of proposed rulemaking (ANPR), the leader of the Office of the Comptroller of the Currency (OCC) said Friday.
In a speech before the CFA Institute Systemic Risk Council (CFA SRC), Acting Comptroller of the Currency Michael Hsu indicated that operational resilience of banking services are critical to the functioning of the financial system. He termed those critical operations.
He cited the addressing of cyber risk as an example of resilience.
“While a cyber attack has not yet crippled a critical operation and caused financial instability, there is broad agreement that one could and that preparations need to be made accordingly,” Hsu said.
“By design, good risk identification processes should result in overinclusive lists,” Hsu said. Done right, that should then give rise to the challenge of figuring out what to prioritize and focus on.”
In other comments, Hsu said that the financial history of the country “suggests that systemic risks can build during periods when the line between banking and commerce blurs.”
He added that, today, risks in private credit, banking supply chains, and, possibly, mortgage servicing—”areas that are being closely monitored by regulators” —are associated with that blurring.