International bank regulation: Right or wrong track?
William “Bill” Isaac, former chairman, FDIC, in his keynote at the 14th Asian Banker Summit, spoke on smarter regulation, greater market discipline, reducing moral hazard, and ending too big to fail. April 29, 2013 | William IsaacI’ve been asked to address the financial crisis in the U.S. which has spread across much of the world and to offer my views on whether we are on the right track or wrong track in our international approach to bank regulation and supervision. I’ve spent my entire career in the financial industry in various capacities. I began as a regulatory and bank acquisition expert with a major law firm and then served as general counsel for a regional bank. In 1978, at the tender age of 34, I was appointed by President Carter to the board of directors of the Federal Deposit Insurance Corporation. I was named Chairman of the FDIC in 1981 after President Reagan’s election and remained in that position until the end of 1985, two years beyond my six-year term. I’ve been a consultant to financial institutions since leaving the FDIC and have served on several boards, including my current service as non-executive Chairman of Fifth Third Bancorp, a leading regional bank. Before proceeding further, let me make clear that the views I express are my own and are not necessarily the views of any agency or firm with which I am or have been associated. For that matter, I’m not sure my family would agree with my views. The period from 1978 to 1992 was exceptionally tumultuous for the US economy and financial system. The 1970s was a period of low economic growth and high inflation – “stagflation” was the term coined to describe it. Paul Volcker was appointed Chairman of the Federal Reserve by President Carter in 1979 with the mandate of getting inflation under control. Volcker, a courageous and principled man, did just that – but at great short-term cost. The prime rate was raised to 21 ½%, creating havoc throughout the economy and financial system. We suffered through a deep economic recession, and the unemployment rate climbed to 11%. A depression ensued in the agricultural sector along with a collapse in the energy sector and a serious ... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Regulation, Risk and Regulationriskregulation,Risk and Regulation, Regulation,Risk and Regulation, Keywords:Asian Banker Summit 2013, FDIC, Fifth Third Bancorp, Dodd-Frank, US Fed Asian Banker Summit 2013, FDIC, Fifth Third Bancorp, Dodd-Frank, US Fed
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