DENVER — Examiners for the Office of the Comptroller of the Currency are worried about concentrations of municipal bonds held by national banks, and have begun asking risk officers to evaluate their exposures, an OCC official said. Kerri Corn, the OCC's director for market risk policy, said the agency is in the opening stages of determining how much risk banks could be facing from their holdings of municipal bonds. The $3 trillion municipal bond market has come under pressure in recent months due to predictions that defaults would increase dramatically in 2011 given the fiscal troubles plaguing state and local governments.
Corn gave her remarks Wednesday at the American Bankers Association's risk management forum in Denver. She was on a panel of regulators discussing how the Dodd-Frank Act is affecting risk management supervision.