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In 2024, firms should anticipate increasing supervisory attention to:

• Funding Plans: Regulators will assess whether firms�� contingency funding plans:
  • Are actionable over a range of possible stress scenarios.
  • Provide for stability and a range of funding sources that can be accessed in adverse�� circumstances.
  • Consider the FRB discount window as a funding source, and if so, whether operational�� readiness to borrow has been established and maintained.
• Liquidity Risk Management: Regulators will increase expectations around:
  • Models (e.g., strength, exposures), uninsured deposits, and held-to-maturity�� securities.
  • Liquidity management and reporting (e.g., shortened windows for daily and intraday�� capabilities, expanded information reporting).
  • Long-term debt requirements (including an interagency proposal to expand required�� holdings of long-term debt to certain banks and holding companies (e.g., $100+�� billion)).
  • Transactions with affiliates (and compliance with Regulation W) impacting capital and�� liquidity positions.
• Interest Rate Risk Management: Ongoing supervisory focus on interest rate risk�� management amid a changing interest rate environment, credit tightening, and quality�� and concentration risks, including stress testing and scenario analysis.

• Planning: Multiple regulators will expand expectations to require more firms under�� their supervisory authority (e.g., $50+ billion banks, Category II and III banking�� organizations, SEC-registered clearing agencies) to engage formal, detailed resolution�� planning and plan submissions (i.e., inclusive of the planning process, execution�� strategy, and consideration of areas of “potential vulnerability�� to resolvability).
• Bridging: Banking regulators will focus on operational resiliency bridge planning,�� including the strategy for formation and stabilization of the bridge depository institution,�� as well as how operations could continue through resolution or separation from parent�� and/or affiliates and any associated activities.

Firms should anticipate that regulators will be considering:

• M&A: Continuing scrutiny of anticompetitive M&A activity, as well as a potentially expanded scope�� of bank merger reviews (e.g., to include nonbank entities such as fintechs) and more timely reviews�� (e.g., shortened timeframes). Deal activity in 2024 will be dictated largely by macroeconomic�� conditions, including interest rates and inflation and tight lending standards, in both banking and�� capital markets.
• Tech and Operational Resiliency: Evolving and growing focus on elements of tech and operational�� resiliency, including deployment of new technologies (e.g., automated systems, predictive analytics,�� cloud); data governance (e.g., privacy, use, sharing); identification of critical operations/core business�� lines/material entities and business continuity planning; threat detection/risk monitoring including third�� party relationships; concentrations and interdependencies; accountability (e.g., roles, responsibilities,�� escalation protocols).
• Examination Scrutiny: Deficiencies identified by regulators, coupled with perceived repeat offenses�� or failures to remediate them, will drive close examination of the size and complexity of firms and�� evaluation of whether management has reached its “limits.��
• Remediation: Consideration and prescription of escalating options for “remediation�� of supervisory�� concerns and identified deficiencies (e.g., enforcement actions, changing management, implementing�� action plans, imposing fines, capping growth, divesting business lines/activities) with the intent of�� simplifying and “meaningfully changing business incentives.��