Companies, banks want clarity on what comes after Libor | 2018 could be first year without bank failure since 2006 | Research: Lessons from the history of bank disclosure requirements
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September 18, 2018
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Internal Audit Watch
Bank announces pilot of AI to bolster internal controls
The pilot of two artificial intelligence technologies by Oversea-Chinese Banking is intended to help the bank enhance internal controls to further safeguard customers and shareholders. "AI has shown an ability to not just analyse huge volumes of data and generate meaningful insights but be a powerful tool in identifying the unknown unknowns in trade anomalies," said Goh Chin Yee, the bank's head of group audit.
Finance Magnates (9/11) 
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Are you coordinating the Three Lines of Defense?
The recently revised IIA Standard 2050: Coordination places stepped-up pressure on CAEs to coordinate activities with other internal and external providers of assurance. This webinar provides both theory and practical application for maximizing your interactions with other assurance providers.
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Risk Management
Companies, banks want clarity on what comes after Libor
Banks and corporations are seeking clarity from regulators on which benchmarks will replace the scandal-plagued Libor. "Libor was originally created for the loans market where it was fit for purpose, but once it moved into the interbank derivatives market, lack of volume meant it was no longer sufficiently robust," says Sarah Boyce of Association of Corporate Treasurers.
Treasury Today (9/11) 
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2018 could be first year without bank failure since 2006
No bank has failed in 2018, and this could be the first year since 2006 to have no bank failure, Russ Wiles writes. The banking industry is strong, with 96% of banks reporting a profit for the second quarter, according to the Federal Deposit Insurance Corp.
The Arizona Republic (Phoenix) (tiered subscription model) (9/9) 
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Research: Lessons from the history of bank disclosure requirements
Professor Joao Granja at the University of Chicago's Booth School of Business performs an analysis of the history of bank disclosure regulations to find insights into current challenges. Granja posits that supervisory regulations and disclosure requirements have a real impact on system stability.
The Columbia Law School Blue Sky Blog (9/12) 
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CFIUS compliance vital to foreign deals
When considering a transaction subject to CFIUS review, getting ahead of CFIUS requirements is essential. We understand both CFIUS and proposed FIRRMA requirements, are approved to work with and report to CFIUS. We can assist both foreign acquirers and U.S. companies. Preparation will pave the way for a smooth process, if handled proactively.
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Regulation & Compliance
OCC's Community Reinvestment Act review period underway
The US Office of the Comptroller of the Currency is asking for public comments as the first step in updating the 1977 Community Reinvestment Act. Banks say the CRA's rules are outdated because they fail to recognize banking technology that makes it possible to apply for loans outside traditional hours or without visiting a financial institution.
Reuters (8/28) 
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Former officials: Congress must restore tools to handle next crisis
When the next financial crisis hits the US, the Treasury Department and regulators will need crisis-management tools Congress gave after the 2008 crisis but later took away, write former Federal Reserve Chairman Ben Bernanke and former Treasury Secretaries Timothy Geithner and Henry Paulson Jr. "We need to make sure that future generations of financial firefighters have the emergency powers they need to prevent the next fire from becoming a conflagration," they write.
The New York Times (tiered subscription model) (9/7) 
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Regulators: Supervisory guidance not legally binding
Supervisory guidance such as advisories and bulletins does not have the "force and effect of law," said the Consumer Financial Protection Bureau, Federal Reserve, Federal Deposit Insurance Corp., National Credit Union Administration and Office of the Comptroller of the Currency in a joint statement. Banks would not be scrutinized if supervisory guidance were not followed, the regulators said.
Reuters (9/11) 
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IA Around the World, Vol. 14 - Taking on Digital
What do JP Morgan Chase, Accenture and Heineken all have in common? Their internal audit functions have already made significant strides with their digital transformation efforts, and they, along with a cross section of other organizations, shared their insights in Volume 14 of Protiviti's Internal Auditing Around the World. Learn more here.
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Fraud & Ethics
Money laundering risk has banks leaving US-Mexican border
Banks are leaving towns on the US-Mexican border as money laundering regulations tighten. The Federal Deposit Insurance Corp. and other regulators have visited an Arizona border town to explain why the rules are necessary.
Bloomberg Businessweek (tiered subscription model) (8/30) 
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Uncovering the full picture of control costs
ICOFR is expensive, with many costs “hidden,” since the departments performing the controls primarily absorb them. In this part of the series, KPMG’s Risk Consulting practice looks at how companies can gain insight into their total cost of control. They can then identify potential savings and find opportunities to add further value.
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Technology
New York sues to prevent fintechs from getting bank charters
New York's Department of Financial Services has sued the Office of the Comptroller of the Currency to stop the issuance of national bank charters to financial-technology firms. Department Superintendent Maria Vullo called the charters for fintech firms "lawless, ill-conceived and destabilizing of financial markets."
Reuters (9/14) 
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Study: Investment banks focusing on AI, not blockchain
Investment banks are prioritizing work on artificial intelligence, data and cloud computing over work on blockchain, according to a study by PwC and an industry group. The research says 45% of institutions have a "high technology investment focus" on data and analytics, while almost 40% of institutions have no focus on distributed-ledger technology.
The Trade (UK) (9/13) 
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Hear about the latest Regulatory Reform in Washington
As the regulatory environment becomes more complex, this is THE event for internal auditors to learn and share leading practices to navigate through the associated risks. An outstanding lineup of speakers including senior regulators and leading internal auditors await you at the 2018 Financial Services Exchange. Register Today!
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IIA News
Attend the October Exchange and gain
Learn the value that Stacey Schabel, vice president and chief audit executive of Jackson National Life Insurance, says auditors in the financial sector gain from attending The IIA's Financial Services Exchange. Watch now.
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Add the Center
The Financial Services Audit Center is the premier resource for auditors in the financial-services industry, delivering low-cost, high-quality knowledge sharing as well as relevant reporting on trends, benchmarking and critical content. Learn more.
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Live the questions now. Perhaps you will then gradually, without noticing it, live along some distant day into the answer.
Rainer Maria Rilke,
poet
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About the IIA Financial Services Audit Center (FSAC)
FSAC is an IIA specialty center for audit professionals in the banking, asset management, and insurance sectors. FSAC advances the professional practice of auditing in the financial services industry through thought leadership, education and training events, professional guidance, and advocacy. Learn more about FSAC and how you can add the center to your IIA membership.
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