A significant benefit of the risk-focused approach is its emphasis on ensuring that the bank’s internal oversight processes are sound and that communication between the bank and senior examiners is ongoing between examinations. That approach is generally supported by institutions we supervise and provides a more comprehensive oversight process that complements our annual or 18-month examinations.
Such an approach strengthens our ability to respond promptly if conditions deteriorate. Another benefit of the risk-focused approach has been a greater amount of planning, analysis, and information gathering at Reserve Banks prior to the on-site portion of the examination.