The Six Must-Read Stories of Regulation and Reform
March 12, 2013 3:18 PM
It was very busy in Washington last week, but the item that produced the most news in the banking world wasn't even on the radar. Attorney General Eric Holder was supposed to talk about drones, but he also made a surprising admission with far-reaching consequences. Following are the most essential stories of Regulation and Reform.
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Attorney General Eric Holder's last question at the Senate Judiciary Committee produced one of his most-discussed answers: Are some banks too big to jail? His answer — that prosecuting big banks is difficult because they "have become too large" — was nothing short of shocking. In one fell swoop, he transformed the debate about "too big to fail" and provided real momentum for the drive to break up the big banks.
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Pity Treasury's David Cohen, the undersecretary for terrorism and financial intelligence, who faced the Senate Banking Committee just a day after Holder's comments. The result was a blistering attack — exclusively from Democrats — asking why regulators did not do more to punish HSBC for its slew of money laundering problems. The bank settled for a record $1.9 billion fine, but that was not good enough for Sen. Elizabeth Warren and others. The hearing is likely to have big implications down the line .
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In any other week, this would have been the biggest news story after the Fed released the first results from its Dodd-Frank stress tests . The central bank said that 15 of the 18 largest banks would be "well capitalized" even under an adverse economic scenario worse than the financial crisis. But this was just the start of stress testing season .
American Banker's editor at large Barbara A. Rehm tackled the OCC's handling of the independent foreclosure reviews — and found it a mess from start to finish . "What the industry and the regulators need most right now is trust. They need the public to believe that they are making sound decisions and doing the right thing. This foreclosure settlement demonstrates a failure on both fronts."
Speaking of the OCC, Comptroller of the Currency Thomas Curry made waves by stating that regulators have uncovered "surprising deficiencies" in anti-money laundering compliance at some of the nation's largest banks. Regulators are considering making more changes to anti-money laundering laws in an effort to boost compliance.
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While bankers are still digesting Dodd-Frank, the next big banking bill could be only eight years away. What will it look like? We sort through the possibilities .
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