Ms Foxx
0:00
I want to associate myself with the remarks the chairwoman made at the beginning about the need to hold people responsible for regulations.
0:10
And Mr Newell, you said the, the regulators were focused on process.
0:17
Well, what I I'm not in favor of adding new regulations because I think that's a waste of time and money.
0:24
But what is there anything that can be done to get the regulators to stop focusing on process and start looking at deficiencies, non compliance and other risks in a bank's operations.
0:39
So we stop the failures that are occurring.
0:45
Certainly Congresswoman, I, I think again, first and foremost, what would be useful here is a general and more structural change to the way that the banking agencies including the Federal Reserve approach supervision.
1:01
Again, I think small changes are probably not ultimately going to suffice.
1:06
It's gonna, gonna require some deep thinking and a much broader change in terms of the culture of supervision and the overall program of supervision.
1:14
Again, that ultimately, you know, results in very clear direction to examiners, that although certainly processes and procedures can be important, especially in the area of risk management because they're, what ultimately gives rise to the risks that matter most.
1:27
Ok.
1:27
Well, let me interrupt you there.
1:29
So do, I mean, it's not our job to, to put out those instructions to them, should we say to this Federal Reserve, write the instructions and hold your bank examiners accountable and give us a report on whether they're being held accountable.
1:49
Y y yes, I mean, I think certainly that would be, a constructive step.
1:53
again, I think there's relatively limited articulation at the regulators, you know, in terms of what their overall supervisory, you know, objectives are and what their directives to examiners are.
2:03
So certainly that that could be a step again.
2:05
I would, I just sort of return to what I think is, again, the single most important point which is, making those kinds of reforms again, to get examiners focused on real core safety and soundness really the, the, the core questions of what are the material risk to the financial integrity of firms.
2:21
so that, they don't necessarily get distracted by.
2:24
So we're, you're saying we have to tell the Federal Reserve how to do its job.
2:29
I mean, is that what you're saying?
2:31
, well, it's, it, it, it, it, it certainly could be the case.
2:34
I don't, I don't want, I would like to defer to the committee in terms of exactly how they want to go about that.
2:39
but I do think I, I, I would say this.
2:41
I think the need is clear for, again, real structural reforms to the way that the, the, the fed and the other banking agencies do.
2:48
Let me, let me move it along.