OCC Report Highlights Key Risks in Federal Banking System — 2024-06-18

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today reported the key issues facing the federal banking system in its Semiannual Risk Perspective for Spring 2024. The OCC reported that the overall condition of the federal banking system remains sound. However, the maturing economic cycle may cause consumer headwinds. It is important for banks to continue identifying material risks and their interconnected impacts. Continuous risk management improvement remains appropriate as this allows banks to guard against complacency. The OCC highlighted credit, market, operational, and compliance risks, as the key risk themes in the report. Highlights from the report include: Credit risk is increasing. Commercial real estate sectors, primarily the office sector and some multifamily property types, are experiencing stress due to a higher rate environment and structural changes. Office and multifamily loans, particularly those with interest-only terms, set to refinance over the next three years pose additional risk.