U.S. banking regulators on Friday released proposed guidance on third-party risk management for banks and credit unions. The proposal was issued by the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration. The agencies said the draft is meant to help institutions better tailor their third-party risk management practices to the risk profile of each outside relationship. In a memo, Federal Reserve staff said the proposal comes as banks increasingly outsource certain functions and rely on third-party arrangements to improve efficiency and reduce costs. The proposal is nonbinding and will be open for public comment, with the agencies framing supervision around a principles-based approach. Federal Reserve Governor Barr opposed the proposal, citing concerns about the standard for what counts as a 「material financial risk」.
U.S. regulators said Friday that they have released proposed guidance on third-party risk management for banks.
The proposal was issued by the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration. The agencies said it is intended to help banks and credit unions better tailor their third-party risk management practices to the risk presented by each third-party relationship.
In a memo, Federal Reserve staff said the plan comes at a time when banks are increasingly outsourcing some functions and relying on third-party relationships to improve efficiency and lower costs.
The proposal will be open for public comment and is not binding. According to the statement, the agencies want supervision of these risks to focus on a principles-based approach. Federal Reserve Governor Barr opposed the proposal because of concerns over the standard for 「material financial risk」.
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