Jan 17 (Reuters) – The U.S. Workplace of the Comptroller of the Forex (OCC) is weighing the way it would possibly present extra transparency into the escalation framework it makes use of to handle supervisory considerations and deficiencies at massive banks, the appearing head of the regulator stated on Tuesday.
Financial institution regulators must also develop “credible mechanisms” to compel divestitures at massive banks, when it’s crucial to cut back their measurement and complexity, stated Michael Hsu, the appearing comptroller of the foreign money, in a speech on the Brookings Establishment.
The OCC’s escalation framework consists of 4 ranges to compel banks to repair points, beginning with a personal supervisory discovering and intensifying to an enforcement motion and ultimately a progress restriction if the regulator finds that deficiencies have nonetheless not been addressed, Hsu stated.
If a progress restriction isn’t efficient, regulators would then think about “breaking apart the financial institution,” or forcing the agency to dump enterprise strains or property, he stated.
Reporting by Hannah Lang in Washington
Enhancing by Tomasz Janowski
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