Corrigan Seeks Tighter Global Standards of Bank Supervision
NEW YORK - Gerald Corrigan, as new chairman of the international Committee on Banking Supervision, plans to put global regulation of financial institutions at the top of the Basel-based group's agenda.
In an interview with the Paris-based International Herald Tribune, the president of the New York Fed said that last month's seizure of Bank of Credit and Commerce International has underscored the problems regulators face in supervising global banks.
"We have to ask ourselves whether we are fully satisfied with the procedures of both the host and the home country," Mr. Corrigan was quoted as saying.
Call for Higher Standards
He does not plan to propose the creation of a "global policeman" for banks, he added. Rather, Mr. Corrigan hopes to raise the regulatory standards enforced by the international committee.
The Committee on Banking Supervision comprises top central bankers from the United States, Belgium, Canada, France, Germany, Japan, Netherlands, Sweden, Britain, and Switzerland. They meet in Basel once a month.
Mr. Corrigan was named head of the committee on July 8. He replaces Huib Muller, a director of the Dutch central bank, who died abruptly in June.
Under current committee guidelines, regulators in an international bank's home country are responsible for supervising the bank's consolidated operations.
The Bank of Credit and Commerce International was seized by regulators worldwide on July 5, in what is generally deemed the largest banking fraud ever. BCCI is charged with using lax regulation and banking-secrecy laws to conceal billions of dollars of fraudulent transactions.
Although the collapse of BCCI was an exceptional case, Mr. Corrigan said, it nonethless highlights the problems of supervising global banks.
He also said he doubts whether home-country regulators have enough information on a bank's worldwide operations to provide proper supervision of its entire operations.
Mr. Corrigan was not available Wednesday for comment on his remarks. [TABULAR DATA OMITTED]