UCE (Economic Finance) LATEST
UPDATED STUDY GUIDE COMPLETE AND
RATED A.
Quality of operational risk management:
Governance activities need improvement. Corporate structure may not be
adequately defined or communicated. Directors' qualifications, ethical
standards, or compensation may be questionable. Oversight may need
improvement. Disclosures may contain inaccuracies.
Control environment needs improvement given the size and sophistication
of the institution. Commitment to internal controls may not be readily
evident or well disseminated. Structure may not be well communicated or
understood throughout the organization. Board oversight needs
improvement, as weaknesses may be present. Control integrity testing
may not be performed with sufficient consistency.
Management may not adequately or consistently respond to risks
associated with operational changes, emerging/changing technologies,
and external threats
Management may not adequately understand operational risks and may
lack adequate expertise to evaluate key technology-related issues.
New/nontraditional product development and implementation needs
improvement, with weaknesses and elevated risk exposure.
Vendor management activities need improvement. Risk exposure may not
be adequately managed. Management may not adequately provide for
continuity and reliability of services furnished by outside providers.
Controls to safeguard physical assets, data, and personnel may not be
adequate. Information security program may need substantive
improvements. Procedures to identify and report potential data losses may
need improvement. Privacy practices may need improvement.
Processes and systems to monitor, track, and categorize operating losses
need improvement.
,MIS for transaction processing needs improvement.
Insurance coverage may not be adequate in consideration of the
exposures present. Tracking procedures may have allowed some policies
to lapse and may need improvement. Due diligence programs for
provider/agent selection and/or ongoing monitoring may need
improvement.
Audit coverage needs improvement. Independence may be impaired.
Competency may be questionable. And scope may be limited. Risk
assessment may need improvement. Follow-up and correction of
deficiencies may be inconsistent, and several repeat issues may be found.
Board oversight may need improvement.
Insuffcient
Quality of operational risk management:
Governance activities are deficient. Corporate structure is not defined or
communicated. Directors' qualifications, ethical standards, or
compensation are highly questionable. Oversight is inadequate or
ineffective. Disclosure is inaccurate and process is significantly flawed.
Control environment is deficient. Findings indicate a lack of awareness,
commitment and/or focus on the importance of effective and appropriate
internal controls. Board oversight is ineffective. Volume and severity of
control exceptions are high. Exposure to potential or realized losses from
key operational areas may be present. Control integrity testing is
nonexistent or is performed inconsistently.
Management does not take timely and appropriate actions to respond to
operational changes, emerging/changing technologies, and external
threats.
Management does not understand, or has chosen to ignore, key aspects of
operational risk. Expertise to evaluate key technology-related issues is
insufficient.
New/nontraditional product development and implementation is
inadequately managed, with significant weaknesses and high-risk
exposure.
Vendor management activities are severely limited or nonexistent. Risk
,exposure is inadequately managed. Management has not provided for
continuity and reliability of services furnished by outside providers.
Controls to safeguard physical assets, data, and personnel are deficient or
nonexistent. Information security program is significantly flawed,
incomplete, and/or inadequate. Annual testing and/or reporting have not
occurred and procedures to identify and report potential data losses are
absent. Privacy practices are inadequate.
Processes and systems to monitor, track, and categorize operating losses
are weak or nonexistent.
MIS for transaction processing is unsatisfactory and inadequate and
exhibits significant weaknesses or may not exist.
Insurance coverage is insufficient for the exposure present. Inadequate
tracking procedures have allowed policies to lapse. Due diligence
programs for provider/agent selection and/or ongoing monitoring are
inadequate, flawed, or ineffective.
Audit coverage is inadequate. Independence is impaired. Competency is
questionable. And scope is inappropriate. Risk assessment is ineffective or
nonexistent. Follow-up and correction of deficiencies is highly
inconsistent. Repeat issues are numerous. Board oversight is limited, and
ability to self police is impaired.
Weak
Quantity of compliance risk:
-Violations or compliance program weaknesses are insignificant in number
and issues or do not exist.
-No e-banking or the Web site is informational or nontransactional.
-All loans are originated in-house with no broker or third-party
relationships.
-Limited/no marketing or advertising of products and services.
Bank offers traditional mix of noncomplex lending, investment, and
deposit products.
-Bank offers products and services to local market/service area.
-Financial institution competition within its marketplace is minimal.
-Volume of products and services offered is reasonable considering its
, financial strength and capability, and growth is stable.
-Bank has few offices, some automated teller machines and centralized
operations.
-Volume of consumer complaints is minimal.
Low
Quantity of compliance risk:
Violations or compliance program weaknesses exist and represent
technical issues with some reimbursement to consumers that are resolved
in a timely manner.
Bank is beginning e-banking and offers limited products and services.
Low volume of consumer and business loans are originated by local
brokers or other third parties.
Limited marketing or advertising practices commensurate with strategic
focus.
Bank offers traditional investment and deposit products and a mix of
traditional and complex lending products.
Bank offers products and services to regional market/service area.
Financial institution competition within its marketplace is considerable.
Volume of products and services offered is increasing considering its
financial strength and capability, and growth is steady.
Bank has statewide branching and automated teller machine network with
decentralized operations.
Volume of consumer complaints is moderate.
Moderate
Quantity of compliance risk:
Violations or compliance program weaknesses are significant in number,
resulting in large consumer reimbursements or regulatory fines and
penalties.
Bank offers a wide array of e-banking products and services (e.g., account
transfers, e-bill payments or accounts opened via the Internet).
High volume of consumer or business loans is originated by multiple
statewide or nationwide brokers or other third parties.
UPDATED STUDY GUIDE COMPLETE AND
RATED A.
Quality of operational risk management:
Governance activities need improvement. Corporate structure may not be
adequately defined or communicated. Directors' qualifications, ethical
standards, or compensation may be questionable. Oversight may need
improvement. Disclosures may contain inaccuracies.
Control environment needs improvement given the size and sophistication
of the institution. Commitment to internal controls may not be readily
evident or well disseminated. Structure may not be well communicated or
understood throughout the organization. Board oversight needs
improvement, as weaknesses may be present. Control integrity testing
may not be performed with sufficient consistency.
Management may not adequately or consistently respond to risks
associated with operational changes, emerging/changing technologies,
and external threats
Management may not adequately understand operational risks and may
lack adequate expertise to evaluate key technology-related issues.
New/nontraditional product development and implementation needs
improvement, with weaknesses and elevated risk exposure.
Vendor management activities need improvement. Risk exposure may not
be adequately managed. Management may not adequately provide for
continuity and reliability of services furnished by outside providers.
Controls to safeguard physical assets, data, and personnel may not be
adequate. Information security program may need substantive
improvements. Procedures to identify and report potential data losses may
need improvement. Privacy practices may need improvement.
Processes and systems to monitor, track, and categorize operating losses
need improvement.
,MIS for transaction processing needs improvement.
Insurance coverage may not be adequate in consideration of the
exposures present. Tracking procedures may have allowed some policies
to lapse and may need improvement. Due diligence programs for
provider/agent selection and/or ongoing monitoring may need
improvement.
Audit coverage needs improvement. Independence may be impaired.
Competency may be questionable. And scope may be limited. Risk
assessment may need improvement. Follow-up and correction of
deficiencies may be inconsistent, and several repeat issues may be found.
Board oversight may need improvement.
Insuffcient
Quality of operational risk management:
Governance activities are deficient. Corporate structure is not defined or
communicated. Directors' qualifications, ethical standards, or
compensation are highly questionable. Oversight is inadequate or
ineffective. Disclosure is inaccurate and process is significantly flawed.
Control environment is deficient. Findings indicate a lack of awareness,
commitment and/or focus on the importance of effective and appropriate
internal controls. Board oversight is ineffective. Volume and severity of
control exceptions are high. Exposure to potential or realized losses from
key operational areas may be present. Control integrity testing is
nonexistent or is performed inconsistently.
Management does not take timely and appropriate actions to respond to
operational changes, emerging/changing technologies, and external
threats.
Management does not understand, or has chosen to ignore, key aspects of
operational risk. Expertise to evaluate key technology-related issues is
insufficient.
New/nontraditional product development and implementation is
inadequately managed, with significant weaknesses and high-risk
exposure.
Vendor management activities are severely limited or nonexistent. Risk
,exposure is inadequately managed. Management has not provided for
continuity and reliability of services furnished by outside providers.
Controls to safeguard physical assets, data, and personnel are deficient or
nonexistent. Information security program is significantly flawed,
incomplete, and/or inadequate. Annual testing and/or reporting have not
occurred and procedures to identify and report potential data losses are
absent. Privacy practices are inadequate.
Processes and systems to monitor, track, and categorize operating losses
are weak or nonexistent.
MIS for transaction processing is unsatisfactory and inadequate and
exhibits significant weaknesses or may not exist.
Insurance coverage is insufficient for the exposure present. Inadequate
tracking procedures have allowed policies to lapse. Due diligence
programs for provider/agent selection and/or ongoing monitoring are
inadequate, flawed, or ineffective.
Audit coverage is inadequate. Independence is impaired. Competency is
questionable. And scope is inappropriate. Risk assessment is ineffective or
nonexistent. Follow-up and correction of deficiencies is highly
inconsistent. Repeat issues are numerous. Board oversight is limited, and
ability to self police is impaired.
Weak
Quantity of compliance risk:
-Violations or compliance program weaknesses are insignificant in number
and issues or do not exist.
-No e-banking or the Web site is informational or nontransactional.
-All loans are originated in-house with no broker or third-party
relationships.
-Limited/no marketing or advertising of products and services.
Bank offers traditional mix of noncomplex lending, investment, and
deposit products.
-Bank offers products and services to local market/service area.
-Financial institution competition within its marketplace is minimal.
-Volume of products and services offered is reasonable considering its
, financial strength and capability, and growth is stable.
-Bank has few offices, some automated teller machines and centralized
operations.
-Volume of consumer complaints is minimal.
Low
Quantity of compliance risk:
Violations or compliance program weaknesses exist and represent
technical issues with some reimbursement to consumers that are resolved
in a timely manner.
Bank is beginning e-banking and offers limited products and services.
Low volume of consumer and business loans are originated by local
brokers or other third parties.
Limited marketing or advertising practices commensurate with strategic
focus.
Bank offers traditional investment and deposit products and a mix of
traditional and complex lending products.
Bank offers products and services to regional market/service area.
Financial institution competition within its marketplace is considerable.
Volume of products and services offered is increasing considering its
financial strength and capability, and growth is steady.
Bank has statewide branching and automated teller machine network with
decentralized operations.
Volume of consumer complaints is moderate.
Moderate
Quantity of compliance risk:
Violations or compliance program weaknesses are significant in number,
resulting in large consumer reimbursements or regulatory fines and
penalties.
Bank offers a wide array of e-banking products and services (e.g., account
transfers, e-bill payments or accounts opened via the Internet).
High volume of consumer or business loans is originated by multiple
statewide or nationwide brokers or other third parties.
