British MPs Look for Answers from U.S. Bank Regulators

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If Comptroller of the Currency Thomas Curry and Federal Deposit Insurance Corp. lawyer Richard Osterman thought they would get only softball questions during their appearance before a British parliamentary committee, they were mistaken.

Curry and Osterman crossed the pond Thursday to discuss U.S. financial policy trends with the Parliamentary Commission on Banking Standards Joint Committee. The panel wanted to learn, among other things, how successful U.S. authorities have been in catching culprits that threaten the safety of the financial system.

"We're eager to learn what from the American experience we might put into our own and try to do better next time," said Andrew Tyrie, a Member of Parliament for Chichester, who sits on the commission.

Curry and Osterman both detailed the statutory tools in their agencies' arsenals.

"We have a wide variety of tools at our disposal at the federal banking agencies in the United States," said Curry. He cited the Office of the Comptroller of the Currency's on-site examination capability and ability to bring both formal and informal enforcement actions.

Osterman, the FDIC's acting general counsel, said the agency's three roles of supervisor, insurer and receiver are "really critical to the FDIC in carrying out its core mission of maintaining confidence in the U.S. banking system."

But, Tyrie had a more pointed question: had U.S. regulators caught the culprits that put the financial system at risk?

"Do you think the lion's share of people who were engaged in, for example, in unsafe and unsound banking practices were caught and were appropriately punished?" he said.

"Well, that's a good question. It's really hard to know," Osterman replied. But Tyrie pressed the issue, telling Osterman that "you're in a much better position to know than most people. In fact, I would go so far as to say you probably know about much of this than anyone."

Osterman said under the FDIC's authority to bring civil cases against failed-bank officers and directors, the agency has sued former managers of 95 failed institutions. Every time an institution fails the FDIC opens an investigation to find out if there is any wrongdoing and whether it merits further action.

"I think we've done a pretty good job," said Osterman. "In connection with the failed institutions, we're netting most of them."

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