Dealing with Examiners

I want you to get up right now, go to your windows, open them and stick your head out and yell ‘I’m as mad as hell and I’m not going to take this anymore!’  Things have got to change.  But first, you’ve gotta get mad!  You’ve got to say, ‘I’m as mad as hell, and I’m not going to take this anymore!’  Then we’ll figure out what to do about the depression and the inflation and the oil crisis.  But first get up out of your chairs, open the window, stick your head out, and yell, and say it:  “I’M AS MAD AS HELL, AND I’M NOT GOING TO TAKE THIS ANYMORE!”  (Peter Finch as Howard Beale in Network (1976))

OK, so yelling at examiners is not a good idea.  I got your attention, though, right?  Now, you need to do the same with your examiners.  I’ve heard of and read too many off-the-wall statements from examiners lately to hold this in any longer.  A few suggestions for you as you prepare for your next exam:

1. Be prepared.  You need to know more about how your bank operates than the examiner.  Understand your liquidity, forward liquidity and contingent funding plans.  Understand your Earnings at Risk and Economic Value of Equity posture.  Call us if you want a refresher course on either one.
2. Don’t fall prey to the “Gotcha! Game”.  If an examiner interrupts your day with a series of rapid-fire questions on a technical topic, delay your response.  “I’m right in the middle of something – can I get back to you in 30 minutes?” is an easy escape clause.  Then, prepare your response (call in reinforcements as appropriate) and reverse the Gotcha! by catching the examiner off guard when you are ready to talk.
3. Do not accept inaccurate or unsubstantiated statements.  Stand your ground and argue (politely) for your position.  If you can’t resolve the issue, ask the examiner to put his concerns in writing (in the Report of Examination) so that you can respond.  
4. Be nice, but be firm.  Examiners are people, too.  Sometimes, emotions or opinions (or supervisors) override common sense and logical thought.  Don’t kill the messenger, but don’t accept the message if it isn’t reasonable.
5. Respond, in writing, to your Report of Examination.  Go on record with your side of the story.  The manager of a baseball game doesn’t expect to get a bad call changed by arguing with the umpire.  His performance is designed to rally the team and increase his chances on the next close call.  The exam is over, and you aren’t going to change the result, but you can make your case for the next exam cycle.  I was told recently that a client’s response letter had been widely circulated by examiners and was the “talk of the office”.  We would be glad to help you write a measured, appropriate response to your next Report of Examination (or other regulatory communication).