If You Ask Me: A Global Banker Reflects on Our Times
Wriston, Walter B.
2007
Competition in Regulation
Would you be in favor of combining the three bank regulatory agencies?[20] Why or why not? | |
I'd be against it, for the simple reason that every industry that's been regulated by one federal regulator has gone bankrupt over time. The number-one example, of course, is the railroads. The airlines narrowly escaped the same fate before Kahn[21] came in and deregulated them. | |
Time and time again, the Federal Reserve has said such and such, and the Comptroller of Currency has taken a contrary view, causing the Fed to reexamine its original position. Competition among regulators has proven just as healthy for the marketplace as competition among private companies. | |
I would be fearful of the consequences of a single regulator, with no competitive pressure on it. | |
Footnotes: [20] In addition to their own state banking authorities, banks are regulated by three federal agencies; the Office of the Comptroller of the Currency in the U.S. Treasury Department; the Federal Deposit Insurance Corporation; and the Federal Reserve System. [21] Alfred Kahn was appointed Chairman of the Civil Aeronautics Board. |