The FDIC’s Readiness for Crises
April 10, 2020 / Source: FDIC OIG
The FDIC’s Readiness for Crises
Thursday, April 9, 2020
The Office of Inspector General (OIG) of the Federal Deposit Insurance Corporation (FDIC) issued its report on the FDIC’s Readiness for Crises. We initiated this evaluation in 2018, and it covered the FDIC’s readiness planning and preparedness activities up to early 2019. Our work was not conducted in response to the current pandemic situation, nor is the report specific to any particular type of crisis.
The FDIC’s mission is to maintain stability and public confidence in the Nation's banking system by insuring deposits, examining and supervising financial institutions for safety and soundness and consumer protection, making large and complex financial institutions resolvable, and managing receiverships. To achieve its mission, the FDIC must be prepared for a broad range of crises that could impact the banking system.
The OIG identified best practices that could be used by the FDIC. Our review of these best practices identified seven important elements of a crisis readiness framework that are relevant to the FDIC – (i) Policy and Procedures; (ii) Plans; (iii) Training; (iv) Exercises; (v) Lessons Learned; (vi) Maintenance; and (vii) Assessment and Reporting.
We found that the FDIC should fully establish these seven elements of a readiness framework to address crises that could impact insured depository institutions. In summary, we found that the FDIC:
(1) Did not have a documented Agency policy and did not have documented procedures to provide for a consistent crisis readiness planning process;
(2) Should develop an Agency-wide all-hazards readiness plan as well as Agency-wide hazard-specific readiness plans, as needed;
(3) Did not train personnel to understand the content of crisis readiness plans;
(4) Should document the important results of all readiness plan exercises;
(5) Did not have a documented process to monitor implementation of lessons learned;
(6) Should establish a central repository of plans to facilitate periodic maintenance; and
(7) Should regularly assess and report on Agency-wide progress on crisis readiness plans and activities to the FDIC Chairman and senior management.
We made 11 recommendations to improve the FDIC’s crisis readiness planning. Management concurred with seven recommendations and partially concurred with four recommendations.
PDF Report:
