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Streamlining Bank Regulatory Exams: Navigating the Tradeoffs

Bank regulators are shifting toward a more streamlined examination schedule, opting to examine banks less frequently. For many financial institutions, this move is a welcomed relief, promising less disruption and the anticipation of lower compliance costs. However, as with Newton’s third law—every action has an equal and opposite reaction—this change carries a set of tradeoffs that banks must carefully consider.