On June 23, 2022, the OCC issued the Semiannual Risk Perspective for Spring 2022 that details the key issues facing the federal banking system. The report, which covers risks facing national banks, federal savings associations, and federal branches and agencies, presents information in five main areas - the operating environment, bank performance, a special section on climate-related topics in emerging risks, trends in key risks, and supervisory actions.
The reports which include data as of December 31, 2021 has the following highlights:
Bank financial performance faces challenges from inflation, a rising interest rate environment, and other implications related to the pandemic and geopolitical events.
Operational risk is elevated as banks respond to an evolving and increasingly complex operating environment. Cyber risk remains elevated.
Compliance risk is heightened as banks navigate the current operational environment, regulatory changes, and policy initiatives.
Credit risk remains moderate as banks face some areas of weakness and potential longer-term implications related to the pandemic, inflation, and direct and indirect impacts of the war in Ukraine.
Across key risk areas, banks are experiencing challenges retaining and replacing staff with specialized experience due to increasing turnover. During this period of increasing volatility, these staffing challenges present increased risk.
The report also highlights OCC’s initiative to act on climate-related financial risks to the federal banking system.
OCC’ full press release can be found here.
Access the Semiannual Risk Perspective for Spring 2022 report here.