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COLUMN: Management failures at U.S. banks can lead to ‘material financial risks’

Eric Young June 8, 2026

U.S. bank regulators are proposing to shift supervisory focus away from management evaluations and toward quantifiable financial metrics. It sounds like progress. But there is a tradeoff worth understanding.

In a recent article by Thomson Reuters, Eric Young warned that, “Regulators would have less ability to send a shot across the bow to warn a bank’s management and board of directors to stop, change course or face serious consequences for weak operational and compliance controls — which can easily lead to material financial risks.”

Every major bank failure in 2023 traced back to management problems that preceded the financial ones.

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Eric Young

Senior Managing Director

Eric T. Young advises highly regulated organizations on reengineering compliance, ethics, and regulatory technology programs to enable reputable and sustainable business growth. He has deep regulatory experience having spent close to 40 years in chief compliance officer roles at some of the world’s largest institutions, including five global banks. Throughout his career, Mr. Young has remediated and transformed corporate compliance programs and financial crime compliance programs including sanctions; integrated compliance and ethics cultures between regions, countries and companies to ensure consistency across enterprises; built compliance budgets; enhanced reporting; created governance frameworks and risk assessment, monitoring and testing programs; closed compliance gaps; restructured compliance teams; and mentored junior staff to create a pipeline of future compliance leaders and enable grassroots compliance ideas, solutions and digital upgrades.
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