We have seen these actions in the past, for example, when banks have engaged in ill-conceived investment securities leveraging programs or entered the subprime credit card market to expand their income. Others may be tempted to cut back on critical riskmanagement infrastructure, such as loan review, to pare expenses and enhance returns.
Bank regulations and supervisory oversight are designed to reinforce the building of systems and the development and application of bank policies, both of which are to highlight for management what could be suspicious or unlawful activity by customers and employees, the basis of the SARs reports. But banks are to make the judgment of what is likely to be useful information for law enforcement.