Jeremiah O. Norton, a U.S. Federal Deposit Insurance Corp. director, said the government may have saddled the financial industry with overly burdensome regulations that don’t work well with each other.
“I’m not sure that we calibrated that right as a government,” Norton said in remarks at his first public event since starting the job in April. “It worries me that we’re not seeing the whole picture as a government.”
Banks are experiencing a “profitability challenge,” squeezed by “regulatory headwinds” from the 2010 Dodd-Frank Act and Federal Reserve indications that interest rates will stay low, Norton said today at a meeting of the Exchequer Club in Washington.
Norton is a former JPMorgan Chase & Co. (JPM:US) banker and deputy assistant Treasury secretary who was sworn in as one of two Republicans on the five-member FDIC. The other Republican is Thomas Hoenig, who is awaiting confirmation as the board’s vice chairman and has drawn attention for pushing a return to Glass- Steagall Act separations of banking functions. Norton declined to comment on Hoenig’s proposals.
The bank regulator said today that working out the international cooperation for his agency’s Dodd-Frank authority to dismantle systemically significant firms is a “vital, critical element.” He also said that so-called living wills required from the big banks “could become a very expensive exercise” if they don’t prove useful in helping regulators dismantle large banks in case of bankruptcy.
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