FDIC updates risk management module for examiners

An examination module addressing risk management is now updated with a new appendix focusing on exam processes and tools, the federal insurer of bank deposits said Friday.

Citing its aim to increase transparency into the agency’s examination processes, the Federal Deposit Insurance Corp. (FDIC) said its Division of Risk Management Supervision has updated the Risk Management Manual of Examination Policies by inserting Part VI, Appendix: Examination Processes and Tools, Examination Documentation Modules.

The Examination Documentation Modules, developed in 1997, direct examiners to use a risk-focused approach in conducting examination activities, “thereby facilitating an efficient and effective supervisory program,” the agency said.

The modules are used in the risk-focused examination framework to tailor examination procedures to the business model, complexity and risk profile of individual financial institutions, the agency noted. They are organized by banking activities and processes in three categories: Primary Modules cover examination planning and the assessment of Capital, Asset Quality, Management, Earnings, Liquidity, and Sensitivity (CAMELS) areas; Supplemental Modules cover additional program areas; and Reference Modules provide more detailed procedures for specific banking activities that are addressed at a higher level in the Primary and Supplemental Modules.

The ED Modules will be added to the Manual beginning with the Primary and Supplemental Modules, FDIC said.