Periodic review of a bank's balance sheet assets and liabilities by chartering agency or bank supervisory agency. Bank examiners focus their attention on three main areas: the competence of bank management; the quality of bank assets, principally loans; and compliance with state or federal banking regulations. Today, examiners also look closely at Off-Balance Sheet liabilities such as loan commitments or guarantees, which are contingent claims on the bank's assets.
Supervisory examinations are carried out by federal, state, and independent agencies. National banks are examined by the Comptroller of the Currency, state chartered banks by the Federal Deposit Insurance Corporation or the state banking department, and bank holding companies by the Federal Reserve Board. Savings and loan associations are examined by the Office of Thrift Supervision, savings banks and credit unions by state banking departments. See also Compliance Examination.
