Banks Lament U.S. Effort to Be Toughest Cop on Planet
By John Heltman
WASHINGTON — The banking industry is increasingly concerned that U.S. regulators’ propensity for tougher rules than those envisioned in global agreements is leading to increasing entanglements between U.S. and foreign compliance regimes. Since the crisis, the Federal Reserve Board, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency have routinely gone further than international standards — such as the capital standards outlined by the Basel Committee on Banking Supervision and more macroprudential guidelines proposed by the Financial Stability Board — implementing more rigorous versions. Fed Gov. Daniel Tarullo, who heads the central bank’s supervisory committee, said during a 2014 congressional hearing that he views “the notion of Basel Committee agreements as a minimum level” of regulation…. The Fed, for one, has advanced stronger rules than those issued by international bodies despite the U.S. central bank’s desire to keep global frameworks intact, said Karen Shaw Petrou, managing partner of Federal Financial Analytics. She said other member jurisdictions that are part of the Basel and FSB process also pursue their own strategic agendas when implementing standards for their banks. “The Fed is working very hard to keep its action within the construct of the global framework because it so fears what might happen if that fell apart,” Petrou said. “But the global framework permits all the gold-plating that in fact fragments [the standards] despite all the rhetoric that everyone’s working together. They’re not. The substance of the rules is strategically very different.”
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