WASHINGTON May 28 A U.S. regulatory agency that
drew criticism for being too cozy with banks ahead of the
2007-09 financial crisis said on Wednesday that it will now
rotate examiners at big U.S. banks every five years, with fewer
examiners housed at banks.
The U.S. Office of the Comptroller of the Currency (OCC)
also said it will devote more resources to multi-bank analyses
conducted by special experts, separate from standard exams.
The OCC has been pushing to revamp its oversight of big
banks. The announcement follows recommendations issued in
December by an international group.
Comptroller of the Currency Thomas Curry asked regulators
from Australia, Singapore and Canada to review his agency's
oversight of large- and mid-sized banks.
"Facilitating the sharing of information and knowledge among
examiners across institutions and rotating examiner assignments
will allow us to provide a fresh and broader perspective to the
examination of each large institution," Curry said in a
statement on Wednesday.
The OCC said implementation would start in the next few
The global group's toughest suggestions focused on
supervision of the biggest 19 banks and the practice of housing
examiners on-site at firms such as JPMorgan Chase,
Citigroup and Bank of America.
Examiners are meant to gain expertise by working on site,
but critics say the arrangement leads examiners to identify too
closely with firms they should scrutinize.
Currently, about 390 of the 520 large-bank examiners work
out of the banks they supervise, OCC spokesman Bryan Hubbard
said. He said top examiners rotate among banks, but there is no
formal process to move lower-level staff around.
The international regulators suggested moving examiners into
central offices, rotating them among banks, and handing more
authority to so-called "lead experts," OCC officials with
expertise in areas such as credit or operational risk who look
across multiple firms to spot problems.
The OCC said it would reduce the number of examiners housed
at banks, in part by hiring some of them as lead experts. The
expert program would increase from 21 officials to about 100.
"While the decision reduces the number of examiners on site
at a particular bank, it does not affect the overall number of
examiners assigned to an individual institution or to the
supervision of large banks as a whole," the OCC said.
Bank examiners will rotate to another large firm in the same
city every five years, the OCC said. Assistant deputy
comptrollers would also see their work assignments rotate.
The OCC also said it would test a new risk management
program and benchmark its activities against international
peers. Both were also recommended by the global group.
(Reporting by Emily Stephenson; Editing by David Gregorio)