April 30, 2010

Federal Financial Regulatory Agencies Issue Final Guidance on Correspondent Concentration Risks

  • Office of the Comptroller of the Currency
  • Board of Governors of the Federal Reserve System
  • Federal Deposit Insurance Corporation
  • Office of Thrift Supervision

For immediate release

The federal financial regulatory agencies issued final guidance today to address the risks associated with funding and credit concentrations arising from correspondent relationships. 

A correspondent relationship occurs when a financial organization provides another financial organization with services related to deposits, lending, or other activities. 

The guidance highlights the need for institutions to identify, monitor, and manage correspondent concentration risk on a standalone and organization-wide basis. The guidance also reinforces the supervisory view that financial institutions should perform appropriate due diligence on all credit exposures to, and funding transactions with, other financial institutions as part of their risk management policies and procedures. The guidance does not supplant or amend applicable regulations such as Limitations on Interbank Liabilities (Regulation F).

Federal Register notice: HTML | 77 KB PDF


Media Contacts:
Federal Reserve Board Barbara Hagenbaugh 202-452-2955
FDIC Greg Hernandez   202-898-6992
OCC Kevin Mukri 202-874-5770
OTS William Ruberry 202-906-6677
Last Update: April 30, 2010