A month ago, one of the nation’s most powerful bank regulators caught our attention when he said in public that the U.S. has too many bank regulations.
Now he’s done it again. And this time, it isn’t just us and a few other credit nerds who noticed. John Walsh, acting director of the Office of the Comptroller of the Currency, plays the leading role in regulating the nation’s largest banks. In a speech this week in London, Walsh criticized efforts by the Obama administration and Democratic leaders in the Senate to impose rules on the banks requiring them to retain a percentage of the riskier investments.
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“To put it plainly, my view is that we are in danger of trying to squeeze too much risk and complexity out of banking as we institute reforms to address problems and abuses stemming from the last crisis,” Walsh told the Centre for the Study of Financial Innovation.
Well, maybe that was putting it a little too plainly. Walsh’s comments angered some Democratic senators, who are now calling for his head.
“Mr. Walsh demonstrated once again that he just doesn’t get it,” Senator Jeff Merkley (D-OR) said in a press release. “It is time—way past time—for the President to nominate a leader for the OCC who is committed to building a solid long-term foundation for our economy.”
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Walsh has made his anti-regulation beliefs known before, such as last month, when he warned a gathering of banking leaders that the wave of new federal laws headed for their industry constituted “a tsunami.”
This time, even though Walsh was a continent away, his comments got noticed.
“Mr. Walsh seems to have developed a dangerous case of amnesia,” Rhode Island Senator Jack Reed said. “Excessive short-term oriented risk taking by banks, borrowers, and investors was a significant contributor to the financial crisis together with lax regulation that tolerated inadequate capital levels.”