“Collaboration” was a key word used generously in the address given by Thomas J. Curry, comptroller of the currency, to the International Bankers Annual Conference on Monday in Washington, D.C.
As various federal agencies now face drastic changes and even elimination under the new Trump administration, Curry spoke of “the necessity of maintaining certain safeguards and high standards.”
“Some will suggest easing safeguards,” he said. “A few will even suggest eliminating them. Others will remember that the worst loans are made in the best of times and urge continued vigilance to build capital and liquidity so that it is available when the tide turns.” He said that this is a reasonable policy discussion to have domestically and internationally and is a debate as old as banking itself.
“During times like these, I think it is helpful to stress two things that remain constant in financial regulation,” he said, “the importance of international collaboration and the value of effective supervision.
He went on to say that In times of change and uncertainty, collaboration among domestic and international supervisors provides perhaps its greatest value, because it takes the best from each to create something greater than any one of them individually.
As head of the Office of the Comptroller of the Currency (OCC), Curry said that he had made collaboration a strategic priority and core value for the agency. “Collaboration is a powerful word,” he said. “For me, collaboration involves including diverse groups with different interests working together to achieve a common goal.”
As an example of collaboration, he cited that since 1989, bank supervisors from member countries of the Financial Action Task Force (FATF) have been collaborating in the fight against terrorism and money laundering. “By monitoring international progress in implementing effective safeguards against money laundering and terrorist financing, the FATF works to identify national-level vulnerabilities with the aim of protecting the international financial system as a whole from misuse,” he said.
He also said that the OCC’s work in the FATF is complemented by its representation on the Anti-Money Laundering Expert Group (AMLEG) of the Basel Committee on Banking Supervision.
“Our AMLEG membership enables us to collaborate with other bank supervisors from around the globe in the interpretation and implementation of the FATF standards in our respective jurisdictions,” he said. “This collaboration promotes consistency in supervisory expectations across the many jurisdictions in which our banks operate and their customers do business.”
In closing, Curry said he wanted to leave a reminder that the fundamentals of banking remain the same: strong capital, ample liquidity, controlled leverage, and limited concentrations. “These are lessons we remember during a crisis, but sometimes forget during extended periods of good times,” he said. “The safeguards implemented since the crisis of 2008 restored confidence in the system by focusing on these basic principles of sound banking.”
He said that as a result, banks are growing in the United States, and have returned to profitability. “At the same time, they are better equipped to weather a downturn than at any time in my professional memory,” he explained. “And that’s a good thing, because as professional risk managers and bankers, we know that sooner or later that downturn will come. When it does, the work we have done since 2008 will soften the blow. We must not forget the lessons of the past crisis. There is exceptional value in strong supervision, value that regrettably sometimes only becomes clear in its absence. We cannot let our guard down.