29 Jun 2020
The Federal Deposit Insurance Corp. is moving to boost the way it monitors for risks at thousands of U.S. banks, potentially scrapping quarterly reports that have been a fixture of oversight for more than 150 years yet often contain stale data.
The FDIC on Monday is expected to kick off a competition among 20 data and technology firms to develop a new reporting prototype that could provide the agency with more timely and targeted data about banks’ credit exposures and deposit information.
The move is focused primarily around modernizing the data the FDIC collects from more than 3,200 community banks the agency oversees. Eventually, the new system might displace the voluminous “call” reports the firms are required to file 30 days after each quarter, which run 60 pages and contain more than 2,200 data fields.
“What we would like to do is frankly make the call reports obsolete, and not because we wouldn’t have the data but because we would have better data and we would have more timely data,” FDIC Chairman Jelena McWilliams said in an interview.
The competition is part of a broader push to modernize the way government watchdogs surveil risks in the market. Proponents say it could also boost consumer protection, help combat financial crime and ensure the banking system serves an inclusive set of customers.
“These kinds of efforts are going to transform financial regulation,” said Jo Ann Barefoot, a former banking regulator who now heads the Alliance for Innovative Regulation. “They can’t see most of what’s going on in the financial system in real time, because they don’t have good enough data.”
By Andrew Ackerman, The Wall Street Journal, 28 June 2020
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