The Federal Reserve announced on Monday it was directing its supervisors to no longer consider "reputational risk" when examining banks, scrapping a metric that had been a focus of industry complaints.

The central bank said it would replace references to the metric “with more specific discussions of financial risk.” Banks can still use the concept in their own risk management policies, the Fed said.

Reputational risk will no longer be a component of examination programs in the Federal Reserve's supervision of banks, the regulator said on Monday. "This change does not alter the Board's expectation that banks maintain strong risk management to ensure safety and soundness and compliance with law and regulation,

The US Federal Reserve has stopped using reputational risk in bank oversight, a move long sought by the crypto industry.

The Federal Reserve said Monday it will no longer consider reputation risk as part of its bank exams. The central bank said it has started the process of reviewing references to reputation risk in its supervisory materials and replacing them,

The Federal Reserve has scrapped “reputational risk” from its bank examination criteria, a decision announced on Monday in Washington. Supervisors will no longer use this vague metric to judge financial institutions,