NR 2000-71
FOR IMMEDIATE RELEASE			
Contact:  Robert M. Garsson  (202) 874-5770
September 17, 2000 				    


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 21st 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." 



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.