Risk Perspectives: Highlights of Risk Monitoring in the Seventh District
The Federal Reserve Bank of Chicago's supervision group follows current and emerging risk trends on an ongoing basis. This Risk Perspectives newsletter is designed to highlight a few current risk topics and some potential risk topics on the horizon for the Seventh District and its supervised financial institutions. The newsletter is not intended as an exhaustive list of the current or potential risk topics and should not be relied upon as such. We encourage each of our supervised financial institutions to remain informed about current and potential risks to its institution.
Current Risk Topics
- District Bank Performance — Core Earnings Weaken: First quarter 2014 earnings at commercial banks located in the Seventh District demonstrated how low interest rates garnered from loan portfolios continue to put pressure on net interest income and ultimately earnings performance.
- Cybersecurity Update: Financial institutions are increasingly dependent on information technology and telecommunications to deliver services to consumers and businesses despite the risk of cyber threats such activity poses.
- Challenges with Providing Banking Services to Marijuana-Related Businesses: Numerous states have enacted laws regarding the decriminalization and legalization of marijuana and/or marijuana related businesses. Given the developments in state laws with regards to marijuana and the expansion of the legalized marijuana industry, a dichotomy now exists between state and federal law, as marijuana remains illegal under federal law.
This edition also features information about the proposed modifications to capital planning and stress testing regulations and stress testing of $10-50 billion companies under the Dodd-Frank Act.