U.S. banks should prepare for a high level of enforcement actions, according to Michael Brosnan, who heads large-bank supervision at the Office of the Comptroller of the Currency.
“You’re going to start seeing more enforcement actions, probably more aggressive enforcement actions than we’ve ever seen before in our working life,” Brosnan, who joined the OCC in 1983, said today at a Clearing House conference in New York.
The heightened attention will not only come from OCC, he said, but also other regulators and law-enforcement entities. “It’s going to be a less forgiving atmosphere, and I can’t say it any more toned-down than that.”
His boss, Comptroller of the Currency Thomas Curry, said at the conference yesterday that his agency, which oversees national banks, is asking heads of the biggest U.S. banks to meet higher conduct standards separate from the Volcker rule and Basel III capital requirements.
Curry has said that the OCC is especially focused on whether such institutions are meeting the “highest standards” in managing operational risk.
Brosnan said the current regulatory environment has “the least tolerance for error” than he’s seen in his career.
“The regulators are making it very clear that this is something to be very worried about,” said H. Rodgin Cohen, senior chairman at Sullivan & Cromwell LLP, which represents some of the largest banks. He questioned the new aggression, saying it’s not as if “over the last couple of years a bunch of outlaws have infiltrated the banks.”
Cohen said this seems to be an environment not based on the punishment fitting the crime but “the punishment fitting the time.”