# O **NEWS RELEASE**

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| ## Comptroller of the Currency      | ##### NR 2000-71               |
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| Administrator of National Banks     |                                |
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FOR IMMEDIATE RELEASE Contact: Robert M. Garsson

September 17, 2000 (202) 874-5770

**Comptroller Hawke Tells Bankers OCC is Using Technology**

**To Improve Bank Supervision and Reduce Regulatory Burden**

WASHINGTON \-- Comptroller of the Currency John D. Hawke, Jr. told
bankers today that the OCC is using technology in innovative ways to
reduce the burdens and maximize the benefits of supervision.

"The OCC has been a government leader in automating its procedures,
helping our examiners to work more effectively," Mr. Hawke said in a
speech to the annual convention of the American Bankers Association.
"But only recently have we been able to exploit the promise of the
technology revolution in a way that provides material benefits for
bankers."

National BankNet, a secure web site available only to national banks,
has been upgraded substantially since its introduction last year, and
promises to drastically cut regulatory paperwork, Mr. Hawke said.

"Early next year, all national banks will be able to prepare branch and
relocation applications

on-line, and submit them electronically," Mr. Hawke said, adding that
other applications will become available for electronic submission
during the year.

"Not only will national banks save countless hours in the filing
process, it will lead to significant economies and ensure greater
consistency and responsiveness in our licensing decisions," he added.

The Comptroller said he expects that the majority of routine
transactions between the OCC and its banks will be handled
electronically over National BankNet in the next few years. For example,
examiners will exchange pre- and post-exam information and quarterly
data with banks on-line and assessments and fees will be billed and
remitted on-line. And the future holds still greater promise, he said.

"The day is near when I and other OCC officials will be meeting with
national bankers on-line \-- to update you on regulatory developments,
explain our policies, and answer your questions," he said. "As national
bankers, you'll have access to our on-line staff directory, to help you
identify the individual responsible for your area of concern. And when
you have concerns \-- with an

-more-

application, a ruling, or an interpretation \-- or when you need help
picking your way through the regulatory thicket \-- we'll be available,
with a few keystrokes, to provide help and advice."

The Comptroller also described two other OCC initiatives that use
technology to improve the bank supervision process.

Project Canary is a package of tools that the OCC is using to identify
emerging risks at individual banks. Its most innovative component is a
system of benchmarks that serve as an early warning tripwire.

The benchmarks consist of 15 risk ratios and measures pertaining to
credit risk, interest rate risk and liquidity. Extrapolating from the
OCC's supervisory experience, thresholds were established for each
measure that represent the point at which risk tends to rise. For
example, the OCC has learned that there is a marked increase in credit
quality problems when a bank's loan-to-asset ratio exceeds 70 percent.

"Canary gives us what no bank supervisor has ever had available before:
a focused, concise, and technologically advanced early warning system
that will allow us to zero in on those banks that have the greatest
amount of financial risk and the greatest possibility of problems," said
Mr. Hawke.

Another initiative begun by Mr. Hawke is the OCC's 21^st^ century
project, an initiative that looks to the day when examiners will have
on-line, real-time access to all the information they need to supervise
effectively.

Many legal and technical issues will have to be resolved, Mr. Hawke
said. "But I believe that the vision of on-line, real time access to
bank information holds the potential to further transform the
supervisory process \-- to reduce the burdens on you and to ensure that
the time of our examiners is spent productively and well," he added.

The Comptroller emphasized that neither Project Canary nor BankNet were
intended to replace the bank examiner or the bank examination process.

"These systems are meant to augment, rather than replace, the work that
OCC's highly skilled examiners do day in and day out at each and every
national bank," he said. "Although we're dedicated to continuous
refinement of state-of-the-art technology to enhance the value of our
supervision, our commitment to the support and development of the best
bank examiners in the world is first and foremost."

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  The OCC charters, regulates and examines approximately 2,400 national
  banks and 58 federal branches of foreign banks in the U.S., accounting
  for more than 57 percent of the nation's banking assets. Its mission is
  to ensure a safe and sound and competitive national banking system that
  supports the citizens, communities and economy of the United States.

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