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BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551
LOUISE L. ROSEMAN
DIVISION OF RESERVE BANK OPERATIONS AND PAYMENT SYSTEMS
September 22, 2014
Ms. Melissa Heist
Associate Inspector General for Audits and Evaluations
Board of Governors of the Federal Reserve System
Washington, D.C. 20551
Thank you for the opportunity to comment on the OIG's draft report titled Opportunities Exist to Enhance the Onsite Reviews of the Reserve Banks' Wholesale Financial Services. We are please the OIG found no deficiencies in the efficiency and effectiveness of the onsite review activities conducted by the division's Financial Market Infrastructure Oversight program. As the report recognizes, we apply international risk-management standards and various supervisory approaches in the oversight of the Reserve Banks' wholesale financial services. We believe this comprehensive approach enhances the effectiveness and efficiency of our oversight of these services.
The draft report identifies one finding and a related recommendation concerning the need for our team to develop and document formal policies and procedures to guide the onsite review of wholesale financial services. As the report acknowledges, we are not a traditional audit organization. We do not derive our oversight practices from conventional audit standards (for example, the development and review of audit workpapers). We agree, however, with the benefits noted of enhancing our oversight procedures, and have initiated efforts to augment existing and develop new (if necessary) procedures that guide our onsite reviews of wholesale financial services.