ABA Banking Journal - February 2014 - (Page 14)

community banking ENTERPRISE RISK MANAGEMENT Widening your risk view How eight banks adapt to increased pressure for formalized ERM BY STEVE COCHEO, EXECUTIVE EDITOR & DIGITAL CONTENT MANAGER I n banking, as in life, people have two ways of learning. One comes from making mistakes and learning to change to avoid them. The other comes from seeing what's happening to other banks and taking preventive and proactive measures. Enterprise risk management fits this scenario perfectly. Sometimes the direct, personal lessons come out of left field. During a recent roundtable discussion about ERM among selected members of 14 | ABA BANKING JOURNAL | FEBRUARY 2014 ABA's Community Bankers Council, all participants reported increasing emphasis from federal regulators. But this didn't always surface during a safety and soundness exam. Two bankers got their wake-up calls through the compliance exam process. "We had a compliance examiner who just hammered us big time, and we got slammed into risk analysis through that exam," says Mike Marhenke of IAB Financial Bank. For the $942.6 million-assets bank, based in Fort Wayne, Ind., the planets had lined up. It lost its compliance officer around the same time as the exam and hired a consultant to help it through the exam. The exam results, and advice from the consultant, got the bank moving on ERM. "We're kidding ourselves if we don't think examiners are going to start pushing on ERM," says Marhenke, president and CEO. "I equate it to the ALCO process back in the early 1980s." Back then, PHOTOS: SHUTTERSTOCK.COM http://www.SHUTTERSTOCK.COM

Table of Contents for the Digital Edition of ABA Banking Journal - February 2014

Chairman's View
Editor's Column
The Economy
Bank Notes
Picture This
Community Banking
Pass the Aspirin
Main Street's Mr. Fix it
Wealth management of the many
Cannabis conundrum
Compliance Clinic
ABA At Your Service
Legal Issues
First Person

ABA Banking Journal - February 2014

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