Magazine article American Banker

Greater Bay Satisfies Fed; Worries on Loan Portfolio

Magazine article American Banker

Greater Bay Satisfies Fed; Worries on Loan Portfolio

Article excerpt

Greater Bay Bancorp. of Palo Alto, Calif., said Monday that it had closed the book on its regulatory problems.

The $8 billion-asset company said the Federal Reserve Board had approved changes made to comply with a January agreement. The Fed had demanded improvements to its risk management, liquidity, interest rate sensitivity, and procedures to comply with money-laundering and anti-terrorism laws and the Bank Secrecy Act.

Greater Bay's management had said it wanted to implement the changes before the Fed's July 7 deadline.

In an interview Monday, president and chief executive David L. Kalkbrenner said Fed requirements had not been a total surprise. The company had determined that its risk management and compliance systems and procedures needed to be enhanced, but it had not completed the process when the Fed made its examination.

Money-laundering and anti-terrorism regulations were already "an area of emphasis" last year," he said, and new compliance software has been implemented.

In addition, all key compliance jobs have been filled, Mr. Kalkbrenner said. Greater Bay filled a new post, chief risk officer, a month before its agreement with the Fed. It later hired a manager to oversee the requirementsof the Bank Secrecy Act and an internal audit director, he said.

The company will add administrative staff as needed, Mr. Kalkbrenner said.

Though analysts agreed that closing the regulatory chapter is good news, Robert Lacoursiere at Lehman Brothers said that Greater Bay had "bigger concerns. …

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