In a recent speech, Acting US Comptroller of the Currency Michael Hsu announced that regulators are exploring new operational resilience requirements for banks, as reported by the Wall Street Journal.
“The federal banking agencies are considering what changes to our operational resilience framework might be appropriate,” Hsu said at a conference. “This is not a problem that capital or liquidity can solve... Ensuring that critical operations and banking services can withstand or recover from disruptive events requires good planning, prudent investment, well-designed systems and regular testing.”
With their operations more global than ever, banks now mirror manufacturing supply chains. And they face similar vulnerabilities, Hsu argued, as demonstrated by the banking turmoil of 2023 and recent cyber attacks against major banks. Banks face other threats as well, such as disruption to the physical data centers that their operations rely upon.
“The sheer magnitude of what can be disrupted has increased significantly—a trend likely to continue for the foreseeable future,” Hsu said. “As the threat surface for disruptions expands, and as authorities in other jurisdictions begin implementing their rules to ensure operational resilience, we are assessing and working with our interagency peers to develop the right approach here in the U.S.”
For more from Michael Hsu, read the Preamble he contributed to Starling Insights' 2023 Compendium.
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