Risk Management in the Private Banking Sector: Federal Reserve Bank of New York Issues New Guidelines

Abstract

In July 1997, the Federal Reserve Bank of New York (FRBNY) issued a paper on ‘Guidance on Sound Risk Management Practices Governing Private Banking Activities’ (the ‘Guidelines’). The paper is the culmination of the work of FRBNY bank examiners who recently concluded a year long study of 40 financial institutions in New York City with private banking departments. Private banking refers to the provision of financial services to high net worth individuals. FRBNY examiners evaluated the private banking policies and procedures of commercial banks, Edge Act corporations, trust companies and the US branches of foreign banks in an attempt to gauge the level of risk management at these institutions. The examiners found ‘varying degrees of sophistication and depth in private banking activities’.

Trusts in Business Research: A Concise Systematic Literature Review

“…Other scholars engaged in more specific studies: for example, Tian et al ( 2016) outlined the role of trust companies in increasing risk levels in the shadow banking sector; Zao & Yang (2016) discussed the process of asset securitization in Chinese shadow banking, focusing on the role of the so-called 'special purpose trust.' Many studies focus on the possible financial 'dark side' of trusts, such as the risks connected to the abuse of trusts (especially in offshore countries) to perpetrate fiscal and economic crimes (Brookins, 2009;Kennedy & O'Brien, 2000;Silets & Drew, 2001;Platt, 2015;Sharman, 2010;Tiernan, 2000) and ways to contrast these phenomena (Marcovici & Noked, 2021;Ramasastry, 1998)…”