The Federal Reserve Board on June 23 Reputational risk removed From its bank surveillance program, the staff order to reach the term of exam manuals and to concentrate on measurable financial exposures.
The FED relocation positions the central bank next to the Federal Deposit Insurance Corporation (FDIC) and the Currency of the Currencythat have made similar changes this year.
Together, the three supervisors supervise each federal insured custody institution. Their coordinated revisions eliminate a subjective standard that, according to experts, exhibited examiners to block bank services for crypto companies.
Moreover, it prevented banks from offering crypto-related services as simple as buying and selling Bitcoin (BTC).
According to the new guidance, Fed-Examinators will receive training to implement the change uniform in all banks of the board and they will collaborate with Peer agencies “to promote consistent practices.”
The memo emphasizes that banks must continue to maintain robust risk management frameworks to protect their safety and reliability. Nevertheless, it clarifies that exam teams only have to tackle reputation effects through specific legal, liquidity or credit channels.
Fed signals openness for regulated crypto activity
Chairman Jerome Powell laid the foundation for the shift in a speech of 16 April in the Economic Club of Chicago, where he insisted at the congress to establish a stablecoin window work and stated that the Fed is not planning Limit legal relationships Between banks and crypto companies.
At the time, the genius act was stuck in the congress. Yet this scenario changed after the Senate sent the measure to the house For consideration after a voice of 51-23 on June 17.
In addition, Powell acknowledged that supervisors took a conservative position after the market failure of 2022, but said that some guidelines “may be relaxed to accommodate responsible innovation.”
He already pointed out to Crypto Guardian Working in banks in the FED-Supervited Banks And promised to maintain safety and allow institutions to “deal with digital assets in a way we understand.”
Powell’s comments reflect witness that he gave to the congress in February, where he confirmed that existing supervisory frameworks allow banks to process crypto, as long as they manage capital, liquidity and operational risks.
The Federal Reserve guideline completes an effort of three months by federal supervisors to remove reputation risks from the policy of bank surveillance, leaving operational, legal and financial criteria as the only reason for research action.