WASHINGTON–The Office of the Comptroller of the Currency (OCC) has released a new report in which it said its top “emerging risk” is credit risk.
The OCC said in its Semiannual Risk Perspective for Fall 2020 report that credit risk “is increasing as the economic downturn impacts customer ability to service debts.”
The report seeks to provide an overview of the risks facing the national banks and federal savings associations regulated by the OCC and is based on data through June 30. It focuses on four primary areas: operating environment, bank performance, special topics in emerging risk, and trends in key risks.
In addition to credit risk, the OCCU report said other risks identified include:
- Strategic risk due to the historically low rate environment, potential credit stress and their effect on bank profitability.
- Elevated operational risk as financial institutions respond to altered work environments and an evolving and complex operating environment. Cybersecurity threats contribute as a key driver of the heightened operational risk environment, the OCC said.
- Rising compliance risk due to a combination of altered work environments, and the requirement to quickly operationalize federal, state, and proprietary programs designed to support businesses and consumers.
The full report can be found here.