Societe Generale to revamp internal controls after $1.3B fine | Fed report: 40% of US banks fall short on risk management | Banks wary of Libor alternatives
November 20, 2018
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Internal Audit Watch
Societe Generale to revamp internal controls after $1.3B fine
France's Societe Generale will pay $1.3 billion for defying American trade sanctions on Cuba. The bank has promised to revamp its internal controls, a US prosecutor said.
The Associated Press (11/19) 
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PwC's 2019 Global Risk, Internal Audit & Compliance Survey
Join us as we explore how risk, internal audit and compliance functions are digitally overhauling their capabilities to keep pace with business needs. This year’s global survey focuses on the impact that effective risk management has on digital outcomes and the role that risk functions play in their organizations’ digital journeys.
Risk Management
Fed report: 40% of US banks fall short on risk management
The US Federal Reserve's inaugural Supervision and Regulation Report found that more than 40% of large US banks failed to "meet supervisory expectations in certain risk-management areas." The report also showed the banking sector's profitability was at a 10-year high.
Bloomberg (tiered subscription model) (11/9) 
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Banks wary of Libor alternatives
Libor is likely to be discontinued, and other benchmarks are available, but Libor alternatives aren't being written into financial contracts. Banks say there is too much uncertainty to reference alternative benchmarks, despite regulators' frustration the process is moving slowly.
Practice Insight (11/15) 
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The Millennial Auditor - Understanding and Managing the Next Generation
Is your department prepared with the flexibility, policies, and technology to attract and manage the next generation of auditors?
Regulation & Compliance
Bowman will take seat on Fed board
Michelle Bowman has been confirmed by the Senate to the Federal Reserve Board's community banking seat. Bowman, who served as chief bank regulator in Kansas and was an executive at Farmers & Drovers Bank, is expected to advocate for changes to the Dodd-Frank Act.
The Hill (11/15) 
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Regulators ease rules for banks in Calif. wildfire areas
Banks in areas hit by California's wildfires will not be penalized for missing reporting requirements, state and federal regulators say. Regulators also agreed that banks could ease some loan terms to help borrowers.
Reuters (11/15) 
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McWilliams: It may be time to change living wills for banks
Banks' living wills may need to be updated to focus on interconnectedness and cross-border relationships, said Jelena McWilliams, chief of the Federal Deposit Insurance Corp. Changes to the Volcker rule are also a priority, she said.
Bloomberg (tiered subscription model) (11/16) 
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FSAC Report: Comparing SR 13-1 to IIA Standards
The U.S. Federal Reserve System's guidance on internal audit and its outsourcing is often used as a baseline by bank inspectors. Learn how this guidance relates to, and compares and contrasts with, The IIA's International Standards for the Professional Practice of Internal Auditing. Read more.
Fraud & Ethics
Danske whistleblower points finger at large European bank
A European bank processed up to $150 billion in suspicious payments, according to the whistleblower who reported alleged money laundering involving Danske Bank. The whistleblower also said two US banks handled dollar payments for Danske in Estonia.
Reuters (11/19) 
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FSAC Brief: Leveraging Analytics and Data Visualization
Growing demands from boards and senior management include an expectation that internal audit provide deeper insight into the strategic risks that organizations face. Consequently, internal auditors need to expand their views on the opportunities available through technology. Read more.
Lagarde: Central banks should weigh digital currency
Lagarde: Central banks should weigh digital currency
Lagarde (Saul Loeb/AFP/Getty Images)
International Monetary Fund Managing Director Christine Lagarde has told a financial-technology conference that central banks should consider issuing digital currency. Lagarde acknowledged risk and that "the case for digital currency is not universal" but said "technology will change, and so must we."
BBC (11/14),  MarketWatch (11/13) 
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IIA News
FSAC AuditCast: Innovation in three lines of defense
Cassian Jae is in conversation with Chris Paulison from Grant Thornton on innovations applied to the three lines of defense model. Paulison discusses innovation and examples in the coordination of the three lines of defense in numerous areas, including risk detection and issue reporting. Listen 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 and relevant reporting on trends, benchmarking, and critical content. Learn more.
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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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