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Post by bot on Jun 27, 2014 16:48:17 GMT -5
WASHINGTON (MarketWatch) -- Some U.S. banks still seem to be in the dark about the riskiness of their businesses, said Federal Reserve Governor Daniel Tarullo on Wednesday. "Some firms still lack reliable information about their businesses and exposures," Tarullo said during a speech in Boston at a conference on the Fed's stress test. "These deficiencies are, in some instances, compounded by weak oversight by senior management and boards of directors, and lack of effective checks and accountability in the process," he said. Tarullo said the stress test "is not a PGA tournament - there is no foreordained cut that some participants will miss." He said the Fed will work with the banks throughout the year on problems and "only in unusual circumstances" should banks be surprised by the outcome. Citigroup [s:c] officials said they were shocked in March when they learned that they had failed the more subjective or "qualitative" part of the latest stress test. Tarullo said that the Fed found that many firms "had a long way to go" to meet high standards of capital planning backed by strong risk management when the stress tests were first conducted in 2009. Given that gap, the Fed has allowed time for banks to work toward that goal. "We do, however, expect firms to continue to make steady progress each year," he said.
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