The Federal Reserve has long emphasized the need for appropriate and strong internal controls in the institutions we supervise, and we have taken a continuous-improvement approach to our risk-focused examinations. For many years, enterprise risk management across an entire entity has received increased scrutiny.
Of course, bankers are the ones who have led the way in continuing to improve the risk-management and risk-measurement processes at their institutions. To be more effective competitors and to control and manage their losses, banks have created many new techniques to improve their risk management and internal economic capital measures.