NCUA Chariman Debbie Matz asked Scott Hunt, the head of the Office of National Examinations and Supervision, the following questions.
"The final rule provides that three years after enactment, a credit union can apply to conduct their own stress test. Does your office have the necessary staffing to supervise that if you agree that a $10 billion credit union at that point can do their own stress test? Are you staffed to handle that?"
You have to go to the fourth paragraph of his response to get the answer, which is no.
Scott Hunt said: "So basically it would pull together both personnel resources, information data gathering as well as an investment in software that we don't have today so the short answer on that is no, we are not ready to take this on."
Hunt notes the difference between the FDIC and NCUA with regard to data collection. He states: "The FDIC has accumulated significant bank data over the years through their Call Report. Their Call Reports are hundreds of pages long in comparison to the very high-level data we gather from our credit unions in the 20 to 30 page range." So, the dearth of detailed information is one factor limiting NCUA's preparedness.
Hunt further points out the difference in staff expertise. He states that FDIC has "acquired resources where they possess the skills and expertise," which NCUA does not possess and will need to acquire. He notes that stress tests are not generic exercises and require considerable judgement.
He also says that "[i]t would require an investment in analytical software that we currently don't possess." This would be an additional expense for the agency, if it decides to allow credit unions to conduct their own stress tests.
Dont look now but you, scott hunt and jim blaine all think the federal reserve should conduct the stress test and supervise large credit unions.
ReplyDeleteHample better trot out one of those white papers that only he understands.