NR 2001- 42
FOR IMMEDIATE RELEASE			
Contact:  Robert Garsson  (202) 874-5770
May 3, 2001				   

Basel Committee Report Outlines Risk Management Principles for Electronic Banking


WASHINGTON -- The Electronic Banking Group of the Basel Committee on Banking 
Supervision, chaired by Comptroller of the Currency John D. Hawke, Jr., set forth fourteen risk 
management principles on electronic banking for financial institutions in a report issued today. 

"Our goal is to alert financial institutions and their supervisors to the nature of risks in 
electronic banking," said Comptroller Hawke.  "We expect bankers will put these principles to 
use as they develop their own customized approaches to risk mitigation."

The Electronic Banking Group's risk management principles address three broad risk categories: 
board and management oversight, security controls and legal and reputation risk management.  
Of primary importance is the principle on effective management oversight of electronic banking 
activities.

"After all is said and done, management recognition of the risks inherent in e-banking and the 
need for an integrated risk management system are fundamental if the specific risks that are 
addressed in the other 13 principles are to be properly controlled," said Comptroller Hawke. 

At the same time, the report acknowledges that the risk profile for each institution is 
different and depends on the scale of electronic banking activities, the significance of 
risks undertaken and other factors.

Today's guidance follows a report by the Electronic Banking Group in October 2000 on 
electronic banking risk management and supervisory issues.  The Group is also preparing a 
report that will address principles for cross-border cooperation among bank supervisors on 
electronic banking. 

The Electronic Banking Group formed in November 1999 seeks a cooperative approach to the 
supervision of electronic banking by international bank supervisors to avoid conflicting 
regulation among different countries and supervisors.  The goal is to promote the development 
of a cooperative supervisory framework for electronic banking activities.  The group consists 
of bank supervisors from the Group of 10 (G-10) leading economies as well as observers from 
Hong Kong, Australia and Singapore.  

Today's report is available at www.occ.treas.gov.

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The OCC charters, regulates and examines approximately 2,200 national banks and 56 federal 
branches of foreign banks in the U.S., accounting for more than 55 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.