InfoBytes Blog
FDIC releases operational risks in 2023 Risk Review
On August 14, the FDIC released its 2023 Risk Review, summarizing emerging risks in the U.S. banking system observed during 2022 and early 2023 in five broad categories: (i) credit risk; (ii) market risk; (iii) operational risk; (iv) crypto-asset risk; and (v) climate-related financial risk. According to the FDIC, the current risk review adds a new section relating to the FDIC’s approach to understanding and evaluating crypto-asset-related markets and activities. Monitoring these risks is among the agency’s top priorities, the FDIC said, and the “failure of three large banking institutions in March and May highlighted certain risks to the banking sector.” The FDIC stated that weaker economic conditions and higher interest rates in 2022 continued through early 2023, and “financial market conditions tightened considerably starting in 2022 on rising interest rates, high inflations, and concerns over a potential recession.” Overall, the FDIC said that “despite these challenges and the market stress in early 2023, the banking industry demonstrated resilience, but industry performance moderated from 2022.”