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GAO-24-107275 1 (2024-04-30)

handle is hein.gao/gaoqja0001 and id is 1 raw text is: U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Comptroller General Washington, DC 20548 of the United States April 30, 2024 The Honorable Martin J. Gruenberg Chairman Federal Deposit Insurance Corporation 550 17th St., N.W. Washington, D.C. 20429 Priority Open Recommendations: Federal Deposit Insurance Corporation Dear Chairman Gruenberg: The purpose of this letter is to provide an update on the overall status of the Federal Deposit Insurance Corporation's (FDIC) implementation of our recommendations and to call your continued personal attention to areas where open recommendations should be given high priority.' In November 2023, we reported that, government-wide, 75 percent of our recommendations made 4 years ago were implemented.2 FDIC's recommendation implementation rate was 67 percent. As of April 2024, FDIC had 12 open recommendations. Fully implementing these open recommendations could significantly improve FDIC's efforts to oversee more effectively the safety and soundness of the U.S. banking system and risks to consumers. In our August 2023 letter, we noted that two of our open recommendations were priority recommendations. Since that time, FDIC has not implemented these recommendations. We ask that you continue to direct your attention to these open priority recommendations, which are related to blockchain technology and financial technology (fintech). We are not adding any new priority recommendations this year. (See the enclosure for the list of recommendations.) The two priority recommendations fall into the following two areas: Blockchain technology. Volatility, bankruptcies, and instances of fraud in the crypto asset markets illustrate the harm consumers and investors may suffer without adequate protections. We recommended that FDIC and other financial regulators jointly establish or adapt an existing formal coordination mechanism to identify and address blockchain-related risks. FDIC neither agreed nor disagreed with the recommendation but noted it coordinated through the Financial Stability Oversight Council, the President's Working Group, and other venues. In February 2024, FDIC reiterated that it has continued to participate in coordination mechanisms, domestically and internationally, to address risks of banks engaging in blockchain-based crypto- asset related activities and to provide regulatory responses as needed. However, the regulators' 1Priority recommendations are those that we believe warrant priority attention from heads of key departments or agencies. They are highlighted because, upon implementation, they may significantly improve government operations-for example, by realizing large dollar savings; eliminating mismanagement, fraud, and abuse; or making progress toward addressing a high-risk or duplication issue. 2GAO, Performance and Accountability Report: Fiscal Year 2023, GAO-24-900483 (Washington, D.C.: Nov. 15, 2023). GAO-24-107275 FDIC Priority Recommendations Page 1

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