What is the purpose of risk assessments used by the FDIC?

The purpose of risk assessments used by the FDIC is primarily to evaluate potential threats to deposit insurance funds. This involves systematically identifying, analyzing, and prioritizing risks that could impact the financial stability of insured institutions and the overall health of the banking sector. By focusing on potential threats, the FDIC can take proactive measures to mitigate those risks and protect depositors, ensuring the integrity of the deposit insurance system.

Risk assessments allow the FDIC to monitor banks' performance indicators and leverage data analytics to identify vulnerabilities, thereby enhancing regulatory oversight. This process ultimately supports the FDIC's mission to maintain public confidence in the nation's financial system by ensuring banks operate safely and soundly, safeguarding the deposit insurance fund that protects consumers' deposits.