The Office of the Comptroller of the Currency, along with the Federal Reserve and FDIC released their long anticipated interagency Notice of Rulemaking. The Proposal, which will be subject to a comment period through November 30, 2023, incorporates final components of the Basel III agreement and lays out significant changes to capital requirements for banks with over $100B in total assets. 

Longstanding guidance to “know your borrower” is respected for good reason. The recent and unexpected upheaval in the banking and lending sector is triggering a renewed focus on financial risk management relating to borrowers and potential borrowers.

Banks and lenders need a clear understanding of the treasury-management function and risk-mitigation strategies employed by their borrowers and potential borrowers. As in previous challenging economic environments, the current uncertainty is an unpleasant, but beneficial, reminder to evaluate – or re-evaluate – these important functions and strategies. The Treasury Management Gap Analysis is an essential way to achieve this goal.