Banking with Interest
OCC’s Hsu on Unfinished Business, Reg Restructuring & Dangers Ahead
Jan 2, 2025
Michael Hsu, the Acting Comptroller of the Currency for over three years, dives into the lessons from the Silicon Valley Bank collapse and the urgent need for new liquidity regulations. He discusses the complexities of regulatory restructuring, addressing the dangers of charter shopping and how it impacts banking stability. Hsu also shares insights on cryptocurrency's dual nature—balancing its speculative risks with its innovative potential—while advocating for a regulatory framework that ensures safety and accountability in the ever-evolving financial landscape.
35:06
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Quick takeaways
- The complexity of bank charters necessitates a reevaluation of regulatory structures to enhance both efficiency and flexibility in oversight.
- Recent banking crises underscore the urgent need for new liquidity rules and a reformed deposit insurance framework to ensure systemic stability.
Deep dives
The Complexity of Banking Charters
Banks have various options regarding their charters, including national, federal, or state charters, as well as the choice between being a state member bank or a non-member bank. This plethora of choices contributes to a complex regulatory landscape that can complicate oversight. To rationalize this system, there may be a push to reduce some of these options, potentially advocating for a single regulatory agency—similar to structures found in other countries. However, this proposal raises questions about balancing the need for efficiency in regulation and maintaining the operational flexibility that choice offers to banks.
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