The Federal Deposit Insurance American Corporation, an independent agency of the federal government, would stop stopping to use the “reputation risk” category as a means of supervising banks.
According to a letter sent by the agency’s acting president, Travis Hill, to the Dan Meuser representative on March 24, banking regulators should not use the “reputation risk” to examine companies.
“Although the reputation of a bank is extremely important, most of the activities that could threaten the reputation of a bank do so through traditional risk channels (for example, credit risk, market risk, etc.) on which supervisors are already concentrating,” notes the letter, reported by Politico.
According to the document, the FDIC ended an “examination of all reputation risk mentions” in its political regulations and documents and “plans to eradicate this concept of our regulatory approach”.
https://www.youtube.com/watch?v=IMVHLPBIRCU
Risk of reputation and speaking
The federal reserve defines the risk of reputation as “the potential that the negative advertising concerning the commercial practices of an institution, whether true or not, will lead to a drop in customers, expensive litigation or income reductions”.
The FIDC letter specifically mentioned digital assets, Hill, noting that the agency has generally been “closed for business” for institutions interested in blockchain or distributed big book technology. Now, according to the document, the FDIC is working on a new direction for the digital asset policy aimed at providing banks with a way to engage with digital assets.
The letter was sent in response to February communication from Meuser and other legislators with recommendations for the rules of digital assets and the means of preventing the speaking.
Industries deemed “risky” for banks are often faced with significant challenges in the establishment or maintenance of banking relations. The cryptographic industry was faced with such challenges during what has become known as the ChokePoint 2.0 operating name.
The unofficial operation has led to more than 30 technology and cryptocurrency companies refused to banking services in the United States after the collapse of Crypto friendly banks earlier in 2023.
In relation: The FDIC is resistant to the transparency of Operation Chokepoint 2.0 – Coinbase Clo
