Summary: Examinations by federal banking regulators are intended to assess the safety and the soundness of banks and identify conditions that may require prompt action to remedy unsafe and unsound banking practices. In recent years, banking regulators have begun emphasizing an institution's internal control systems and the way it manages and controls its risks, rather than determining whether a bank was operating in a safe and sound manner at a specific point in time. This evolution to a risk-focused approach responds to rapid changes in the banking industry and the speed with which an institution's risk profile can change. This approach is particularly important because, in recent years, major consolidations have produced several large, complex banking organizations with diverse risks and sophisticated risk-management systems. This trend can be expected to continue as the result of recent landmark legislation that allows banks, securities firms, and insurance companies to acquire one another. This report studies the risk-focused approaches used by the Federal Reserve and the Office of the Comptroller of the Currency (OCC). GAO (1) describes the general characteristics of the regulators' risk-based approach to examinations of large, complex banks, explaining how they differ from past examination practices; (2) compares the implementation of the risk-focused approaches of the Fed and OCC; and (3) identifies the challenges faced by both agencies as they continue to implement their examination programs for large, complex banks.