A similar observation can be made with respect to consumer compliance supervision of community banks, for which the Federal Reserve implemented a new examination program in January 2014. 21 While we have traditionally applied a risk-focused approach to consumer compliance examinations, the new program more explicitly links examination intensity to the individual community bank’s risk profile.
In this year’s Concluding Remarks I also raised the possibility that these banks could take advantage of special institutional protection schemes based on agreements to provide reciprocal guarantees on the solvency and liquidity of their members, along the lines of similar schemes in other European countries, with benefits when it came to calculating capital requirements. This is an opportunity that merits serious consideration.