Magazine article American Banker

OCC's Williams Urges Attention to Reputation Risk

Magazine article American Banker

OCC's Williams Urges Attention to Reputation Risk

Article excerpt

CHICAGO -- Ask someone to describe veteran regulator Julie L. Williams and you're likely to hear adjectives like smart, straightforward, and no-frills. So perhaps it is little surprise that she used what may be the last major speech of her second stint as acting comptroller of the currency to address the basic need for bankers to do the right thing.

"Today's most elusive, difficult to manage, and perhaps most feared risk," she said in a speech here Friday, is "reputational risk."

"The ultimate protection ... [is] to make clear throughout every corner of the organization that no deal, no sale, no loan, no customer, no profit opportunity is worth compromising the organization's good name and reputation," Ms. Williams said at a conference hosted by the Federal Reserve Bank of Chicago.

Ms. Williams has been acting comptroller since October, when Jerry Hawke's term ended. It is her second time at the agency's helm. She was acting comptroller for eight months in 1998 before the recess appointment of Mr. Hawke. This time she is running the agency while nominee John C. Dugan awaits Senate action.

In her full-time job as the agency's lead lawyer, Ms. Williams gets a close look at the reckless things banks do to jeopardize their standing with customers, employees, and investors. She has used her bully pulpit in the past to criticize banks' poor customer service, faulty privacy protections, and shoddy or abusive lending practices.

But Friday her attention was focused on blowing bank reputations, which can cost a CEO's job; spark shareholder lawsuits, indictments, or fines; and certainly bring the wrath of regulators.

"While we really don't regulate corporate ethics, we can and we will notice" whether a bank's organizational framework supports or undermines sound corporate values and an ethical climate, she said. …

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