Oxley, B of A Chief Speak out on Regulatory Reform

Article excerpt

The debate over the future of financial services regulation finally appeared to start in earnest Thursday, as a key lawmaker pledged to hold hearings on the issue and the head of Bank of America Corp. weighed in.

House Financial Services Committee Chairman Michael G. Oxley, making his first public comments on the topic, called the existing setup inefficient.

"We can do better," the Ohio Republican said at an all-day symposium on the topic sponsored by the Federal Deposit Insurance Corp. "The inefficiencies in the current system and the increasingly competitive nature of the international market are going to eventually collide and put U.S. financial services firms at a potentially serious disadvantage."

Bank of America's chairman and chief executive officer Kenneth D. Lewis supplied what he said was an example of that inefficiency.

"Our company has at least 90 examinations scheduled for this year with five different federal regulators -- and that tally does not include activities of the FDIC, which has only recently assigned a resident examiner to our headquarters in Charlotte," he said. "What more we have left to inspect I don't know, but there's no question there are opportunities for streamlining."

Rep. Oxley put the debate over streamlining supervision into dollars and cents: $519 million for the FDIC, $459 million for the Office of the Comptroller of the Currency, $161 million for the Office of Thrift Supervision, and $100 million for the Federal Reserve Board.

"This sum totals more than $1.2 billion to regulate banks and thrifts in this country," he said. "That is not even including insurance regulators or state regulators. I have no question the money to protect the soundness of the economy is well spent, but is it possible to spend less money on a more efficient regulatory structure?"

FDIC Chairman Don Powell first raised the prospect of an overhaul in May and offered a recommendation for change in October: having one federal agency each for banks, brokers, and insurers.

Rep. Oxley said such a radical overhaul faces long political odds but should be debated. "I've been in politics too long to expect something as simple as that to work, but why not consider it further?"

Yet speakers on two panels at the conference were less supportive of potential changes, either suggesting more moderate reforms than Mr. …