Bair Says Single U.S. Bank Regulator Is ‘No Panacea’

Bair Says Single U.S. Bank Regulator Is ‘No Panacea’ - 8/4/2009

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News	News 2009
HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

HEADLINE NEWS:

Bair Says Single U.S. Bank Regulator Is ‘No Panacea’
Alison Vekshin

Bloomberg. August 4, 2009
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EXCERPT: Federal Deposit Insurance Corp. Chairman Sheila Bair opposes the merger of four existing federal bank regulators into a single agency, saying for the first time such a plan is “no panacea” for effective oversight. Consolidating the agencies would disrupt regulatory staffs and may overlook the needs of community banks that rely on state supervision, Bair said in testimony at a Senate Banking Committee hearing today in Washington. Bair said she supports other aspects of the Obama administration’s overhaul. “One of the advantages of multiple regulators is that it permits a diversity of viewpoints to be heard,” Bair said. President Barack Obama is proposing to create a National Bank Supervisor by merging the Office of Thrift Supervision that oversees savings and loans with the Office of the Comptroller of the Currency that regulates national banks. Legislators are pressing further, suggesting Bair’s agency, regulator of some state-chartered banks, and the Federal Reserve, which has a similar role, give up supervision power to a single agency. Policymakers had urged regulator consolidation after previous crises, “yet we didn’t act,” said Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat. “As a result we’ve had some real costs,” including regulatory lapses and lack of accountability, Dodd said. Comptroller of the Currency John Dugan, OTS Acting Director John Bowman and Federal Reserve Governor Daniel Tarullo also testified. ‘Distractions, Confusion’ Consolidating the agencies would cause “distractions and organizational confusion” at a time when staff is tied up with banking industry challenges, Bair said. Community banks would be ignored by a single regulator, she added. The structure should accommodate more than 8,000 banks in 50 states “with significantly different economies,” Bair said. Bair and Dugan said they supported the administration’s proposal to merge the OTS and OCC.

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