WASHINGTON -- Bank regulators are continuing their efforts to cut burdensome regulation, Fed Governor Susan M. Phillips told a meeting of bankers.
"I can assure you that the regulatory agencies are making a sustained effort to reduce this cost," she said. "I have been directly involved in that effort."
Speaking last week before a meeting of the Association of Bank Holding Cos. in Tucson, Ariz., Ms. Phillips outlined the current efforts of the Fed and other regulators to cut red tape. These include:
* Streamlining and more efficiently processing bank applications at each agency.
* Standardizing and simplifying application and reporting forms across agencies.
* Coordinating bank exams across agencies, especially examiner training and interpretation of regulations.
"Disruption to normal bank operations can be minimized if we can avoid having multiple sets of examiners going through a single bank," she said.
Cost of Being Regulated
The newest Federal Reserve governor estimated the true cost of regulatory burden to be between 8% and 16% of noninterest operating costs, or $15 billion, when deposit insurance premiums and opportunity costs of sterile reserves are included.
She also predicated that the regulators would meet their Dec. 19 deadline for the release of their study on regulatory burden, as required by Congress. She urged bankers to closely review that study.
But she also offered a warning to bankers.
"The industry must exercise caution in its behavior so as not to provide additional justification for the micro-management of the banking industry," she said.