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National Banking Trends
Regulators Panel Explores Banker-Regulator Tensions
Interview with Michael L. Stevens, Conference of State Bank Supervisors
In recent years, a difficult banking climate has tested relationships between bankers and their regulators. In times like these, it is especially important for regulatory agencies to maintain open communications with the institutions they supervise, according to a panel of regulators at the Federal Reserve Bank of Atlanta's Banking Industry Outlook conference on March 1.
"I don't think the relationship is designed to be easy," said Michael Stevens, senior executive vice president of the Conference of State Bank Supervisors.
In addition to addressing tensions in the regulator-banker dynamic, the panelists discussed:
Good times made the living easy
In that environment, some bankers believe that voicing concerns about regulation can invite retribution from examiners, noted the session's moderator, the Atlanta Fed's Michael Handelman. That perception among bankers does exist, said the panelists—Stevens; Jim Watkins, deputy director, Division of Risk Management Supervision of the Federal Deposit Insurance Corporation (FDIC); and Jeremy Newell, senior supervisory financial analyst at the Federal Reserve Board of Governors.
Regulators value two-way communication
Fed working on 50 Dodd-Frank rules
Dodd-Frank and community banks
Watkins told the audience that the FDIC is conducting a yearlong study on the future of community banking. He noted that the dramatic decline in the number of federally insured banks—from 18,033 in 1985 to 7,357 at the end of 2011—has come mainly from dwindling numbers of small institutions. Community banks still make up 94 percent of the country's commercial banks. And small institutions make 40 percent of small business loans even as they hold less than 10 percent of the industry's total assets, Watkins pointed out.
2011 first $100 billion year since 2006