A man holding one of the most important and powerful jobs for keeping the U. S. banking system safe from another epic crash like that of 1929 and 2008 has tongues wagging over the bizarre speech he delivered at the Clearing House Annual Conference last Wednesday in New York.
Keith Noreika is the acting head of the Office of the Comptroller of the Currency (OCC), the Federal agency responsible for supervising national banks and inspecting them for safety and soundness.
What Noreika recommended last Wednesday, however, would make the U. S. banking system significantly more dangerous than it already is. Noreika thinks there is no good reason to prevent giant corporate conglomerates from owning insured depository banks that are backstopped by the U. S. taxpayer. He had this to say in his speech last week:
‘The narrative persists to keep commercial interests from owning or having controlling interests in banks, in part, because many view them as ‘public interests’ rather than the ‘private businesses’ they are. In more modern times, this line of reasoning was used to keep companies like Walmart from owning a state-chartered FDIC-insured industrial loan company, while allowing others like Target, to own a credit card bank. The narrative also ignores the fact that banks are subject to a robust regulatory regime to ensure their safety and soundness and compliance meant to protect both markets and consumers.’
This post was published at Wall Street On Parade on November 13, 2017.
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