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GAO-25-108050 1 (May 19, 2025)

handle is hein.gao/ptyonrmdfld0001 and id is 1 raw text is: GAO U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Comptroller General Washington, DC 20548 of the United States May 19, 2025 The Honorable Travis Hill Acting Chairman Federal Deposit Insurance Corporation 550 17th Street, N.W. Washington, D.C. 20429 Priority Open Recommendations: Federal Deposit Insurance Corporation Dear Acting Chairman Hill: The purpose of this letter is to call your personal attention to two areas based on GAO's past work and four open priority recommendations, which are enclosed.1 Additionally, there are six other GAO open recommendations that we will continue to work with your staff to address. We are highlighting the following areas that warrant your timely and focused attention. Specifically: Bank supervision. The 2023 failures of Silicon Valley Bank and Signature Bank raised questions about whether the federal banking regulators took sufficient action to ensure that financial institutions promptly addressed supervisory concerns, such as weak liquidity and risk management practices. In November 2024, we recommended that the Federal Deposit Insurance Corporation (FDIC) establish procedures-such as vetting meetings-to ensure that managers formally consult with the examination team and relevant stakeholders before making substantive changes to examination findings for certain institutions. We also recommended that FDIC consider periodic assignment rotations for certain case managers. By implementing these two recommendations, FDIC could better ensure that its escalation decisions are independent and evidence-based. Blockchain technology. In 2023, we found that financial regulators lacked an ongoing coordination mechanism for addressing blockchain risks in a timely manner. For example, regulators identified financial stability risks posed by stablecoins in 2019 but did not identify the need for action to address these risks until November 2021. We recommended that FDIC and the other federal financial regulators jointly establish or adapt an existing formal coordination mechanism to identify and address risks posed by blockchain-related products and services. Such a mechanism would help FDIC and the other regulators collectively identify risks and develop and implement a regulatory response in a timely manner. 1GAO considers a recommendation to be a priority if, when implemented, it 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. GAO-25-108050 Page 1

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