19 of America’s biggest banks were recently put through a series of tests by the Office of the Comptroller of the Currency (OCC)and we’re sorry to report that according to an article from American Banker not one of them passed on the subjects of internal auditing, risk management or succession planning.  Wow.

The only good news is that two of the 19 banks met the requirements for risk-taking and communicating that across the company spectrum.

OCC veteran Mike Brosnan was interviewed for the article and he explained how the agency reviews have changed since 2008.

“Rather than putting the primary focus on credit, liquidity, interest rate and price risk, Brosnan has the OCC's large-bank examiners targeting operational, compliance, strategic and reputation risks.
"For the first time in my life, we actually say this basket of risks is more important, and more of a priority for the system to deal with, than" asset quality, liquidity, interest rate risk and trading activities.”

He went on to say,” the OCC figures 14 of the 19 banks are still 12 to 24 months away from having a board of directors that is exercising the proper oversight.  Two are there today and three more are within a year of reaching this goal.”

Various agencies are doing various kinds of stress tests on the big banks.  The goal ultimately is to strengthen them and restore consumer confidence in them.  It’s clear they have a way to go.
Bank of America, Wells Fargo and Citibank were among the nineteen.