Magazine article American Banker

Regulators Need Civilian Review Board

Magazine article American Banker

Regulators Need Civilian Review Board

Article excerpt

This Congress continues to chant the reform mantra and to question the relationship between government and business across industries.

While the questions, debate, and confusion continue to get louder, there are still few answers being proposed. For the banking industry and the communities that both support it and rely on it, this inaction could be crippling.

I would like to rise above the bureaucracy and the politics and propose a holistic solution that would dramatically change the regulatory compliance and appeals process: a civilian review board.

Creating a public-minded board that is closest to the challenges at hand would bring change to the point of impact.

Simply shrinking the existing regulatory process would change little; that would leave the industry with a smaller version of all the things that didn't work before.

Change must involve civilians as well as regulators. Ignoring one group means a lopsided solution that will either collapse or get caught up in an ineffective bureaucracy.

How do we break up this bureaucracy, so that a civilian review board can thrive and exist?

At Arthur D. Little, we have developed a tool called the Unwritten Rules of the Game (UROG). It is based on an organizational philosophy that before change can happen and be sustained, you need to examine the behaviors that are damaging or preventing success.

Among banking regulators, there are four UROG forces that are affecting the economy:

* First, examiners have too much discretion to apply to the regulations that they enforce. …

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