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🟢 Federal Reserve Removes 'Reputation Risk' from Bank Supervision
📣 BlockBeats Report | Regulatory Update
In a significant policy shift, the Federal Reserve has officially removed “reputation risk” from its bank supervision framework.
🔍 What Changed?
The Fed will:
Eliminate references to ‘reputation’ from examination manuals
Replace them with specific financial risk assessments
Train examiners for consistent application
Coordinate with other federal regulators for uniform standards
📊 Why It Matters:
This move aims to:
Boost regulatory clarity
Emphasize concrete, measurable financial risks
Avoid vague and subjective regulatory triggers
⚠️ Key Clarification:
Banks are still expected to:
Maintain strong risk management systems
Ensure compliance with all applicable laws
Manage ‘reputation risk’ internally if they choose
This decision may signal a more predictable and transparent regulatory environment for U.S. financial institutions.