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Effective ERM: The Roadmap to Operational Efficiency
Wednesday, February 15, 2012 (2462 reads)

Risk management used to be a “trial by fire” method of operation. You wait for something to happen and clean up the mess when it does. Today’s world of on-demand information, market fluctuations, and constantly evolving computer vulnerabilities requires a much more proactive approach. Enterprise risk management (ERM) helps business leaders control risk and make decisions swiftly. The challenges for any risk management system stem from complexity in maintenance and coordination. Each new regulatory mandate adds a new project initiative and the integration and maintenance of these new project initiatives usually involves little synchronization. By instituting an ERM program, you will have set the framework for evaluating uncertainties, thereby managing threats and providing opportunity to build value for your institution. A structured ERM program provides a holistic view of the institution’s business opportunities and risk profile, with the goal to minimize operational losses while maximizing returns on new business ventures.

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When Credit Unions Expand: Compliance and Risk Management
Wednesday, February 15, 2012 (1784 reads)

In the wake of the mortgage and banking crises, public opinion of the banking industry in general, but more particularly regarding the largest banking providers, has become decidedly negative. Even the recent wave of Occupy protests have singled out the major banks for particularly pointed criticism. “Bank Transfer Day,” bolstered by social networking, was picked up and encouraged by protesters across the country, and became a plus for those institutions perceived to be smaller and closer to the customer. Estimates of the impact vary, but some meaningful amount of assets was moved out of large banks to credit unions during the fall of 2011. This incident serves as a recent reminder that competition in the retail banking space is fierce, and that all participants must balance marketing pressures with regulatory obligations.

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D&O Liability Policy Pitfalls Can Ensnare Bank Executives
Wednesday, February 15, 2012 (1405 reads)

There are a number of key issues that might influence the effectiveness of a directors’ and officers’ (D&O) liability insurance policy when a bank fails and the Federal Deposit Insurance Corporation (FDIC) steps in.
The standard for D&O liability in claims brought against them by the FDIC in its capacity as a receiver of a failed bank is either negligence or gross negligence, depending on applicable state law. Although it might be more difficult to establish gross negligence, neither standard presents any insurance implications, as the policies will typically cover any wrongdoing short of willful or knowing misconduct. The FDIC, however, may sometimes elect to seek civil penalties against these individuals, and fines and penalties are almost always excluded from D&O coverage.

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Sterling National Bank Still Does Business the Traditional Way
Wednesday, February 15, 2012 (3929 reads)

In a storied New York, before big-box chains dominated the commercial market, neighborly customer service was a given: the local butcher knew your weekly order, the barber asked about your children by name, and the clothing store had an outfit in mind when you walked through the door. Louis J. Cappelli, CEO of Sterling National Bank, believes that this level of service should not be antiquated, and that his clients – primarily small and medium-sized businesses – come to him precisely because this is what he has to offer.

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Small Change
Wednesday, February 15, 2012 (1540 reads)

Glens Falls National Bank and Trust Co.
Marilyn R. Hensel has been appointed to assistant vice president and trust officer in the trust department. She joined the bank with extensive trust and tax experience. She is a certified trust and financial advisor through the Institute of Certified Bankers, and a graduate of the State University of New York at Albany with a bachelor’s degree in economics and a business minor.

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NY Lenders Wary of Oil and Gas Leases
Wednesday, February 15, 2012 (1680 reads)

Lenders in upstate New York are increasingly concerned about oil and natural gas leases on mortgaged properties and are refusing to finance properties with those leases.

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AG Investigates Ft. Drum Foreclosures
Wednesday, February 15, 2012 (1333 reads)

The state attorney general’s investigation of possible foreclosures involving military personnel should alert mortgage lenders and servicers to the hazards of noncompliance with the Servicemembers Civil Relief Act (SCRA).

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Managing Mother Nature: Planning for Extreme Weather Events
Wednesday, February 15, 2012 (2812 reads)

Taken separately, the most severe natural events are unlikely to occur. However, Mother Nature can take many forms, and her wrath is notoriously difficult to predict accurately, even with the best practices and software tools used by meteorologists. It is that unpredictability that makes such events so destructive.
But severe weather is only one part of the risk equation. Industries must manage weather risk on a day-to-day basis. Despite the severity of extreme events and the frequency of lesser events, risk analysis of weather is still rarely given the prominence it deserves. It is crucial to determine what risks emerge when various types of weather conditions strike. Organizations should take a more strategic approach to this type of  risk. Increasingly, companies are adopting more sophisticated techniques to specifically account for, rather than ignore, the inherent uncertainty and unpredictability that characterize weather risk.

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Demonstrating Compliance Effectiveness: Why it’s Critical for Financial Services Compliance and Ethics Programs
Wednesday, February 15, 2012 (1917 reads)

Expanded regulations continue to go into effect as a result of the Dodd-Frank Act. As a result, financial services organizations must not only show that they have compliance and ethics programs in place, but be capable of demonstrating that their programs are actually working. Regulatory scrutiny of corporate compliance programs has shifted from a focus on policies, procedures and retrospective audits, to proactive measures of effectiveness and desired results. Regulators are increasingly working to prevent organizations from “going through the motions” of compliance and instead requiring them to proactively show the substance behind their programs. Many financial services organizations now seek to implement measurements that will help them demonstrate the effectiveness of their compliance and ethics programs.

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New Report Sheds Light on Wall Street Inequity
Wednesday, February 15, 2012 (1573 reads)

As a local community banker, a recent news report on the financial assistance provided by federal regulators to the nation’s largest and riskiest financial institutions at the height of the recent financial crisis made my blood boil. The report, drawing from 29,000 pages of Federal Reserve documents obtained under the Freedom of Information Act, uncovers trillions of dollars in secret Federal Reserve Board “no strings attached” loans that allowed these too-big-to-fail institutions to net $13 billion in profits – at exactly the same time they were bringing our economy to the brink of collapse. Once again Wall Street gets the gold while Main Streets like ours get the shaft.

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2012 a Good Year, but Not a Boom Year, Economists Note
Wednesday, February 15, 2012 (1372 reads)

Economy-watchers have a lot to keep track of in the coming year – the euro crisis overseas, the U.S. housing market, job growth and the Fed’s low interest rate policy. At a Jan. 17 conference held at Hofstra University in Hempstead, Long Island, an economist and a business journalist/professor interpreted what that may mean for the finance and business sectors in New York state this coming year. And “may” is the operative word.

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Euro crisis underscores need for risk management programs, even at smaller banks
Wednesday, February 15, 2012 (6416 reads)

For banks in the Big Apple and across New York State, the near-meltdown of the global financial system in 2008 was a wakeup call. Once a backwater, risk management has vaulted to the forefront of bank operations in the years since. Along with a prudent desire to improve in this crucial area, financial institutions are also now scrambling to meet a myriad of new demands issued by state and federal regulators and Congress, say risk management consultants who work with the financial industry.

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