NR 2002- 80
FOR IMMEDIATE RELEASE			
Contact:  Robert M. Garsson (202) 874-5770
October 15, 2002				    

Comptroller Explains the Structure of U.S. Bank Supervision

BEIJING -- Comptroller of the Currency John D. Hawke, Jr. outlined the 
complexity and rationale of the structure of U.S. bank supervision before 
an audience Monday at the People's Bank of China.  

Mr. Hawke pointed out that Americans have over the years supported the 
framework of the U.S. regulatory system, despite its complexity.

"Americans didn't necessarily see regulatory complexity as a bad thing.  
It was viewed instead as a safeguard against the dangers of regulatory 
hegemony and abuse – and as an incentive to regulatory responsiveness 
and efficiency." 

Three federal agencies and the states provide a balance in the U.S. scheme.

"Dividing regulatory authority between the federal government and states – 
and then dividing it again, over a period of years, among three separate 
federal agencies – ensured that no single agency would be able to gain 
meaningful dominance," Mr. Hawke said.

Mr. Hawke underscored the benefit of multiple agencies.

"Competition can be as productive in the public sector as in the private,
" the Comptroller said. "In the case of bank supervision, the assumption 
has been that the agencies would each do their jobs better with bureaucratic 
competitors in the mix, challenging them to excel.  Whether or not this was 
Congress's rationale, most agree that it has been the happy result."

Mr. Hawke also reflected on why the unwieldy structure of U.S. bank 
supervision survives.

"There has never been a clear and compelling consensus for change.  The U.S. 
banking industry and other interest groups have learned to live with – and 
take advantage of – our existing system.  For them, change would be unwelcome,
" Mr. Hawke said.

"Even those groups that might be expected to support supervisory rationalization 
– consumer and public interest groups, for example – have not expressed that support 
in any consistent or unified way.  And the regulatory agencies themselves have 
never been enthusiastic about proposals to simplify supervision – especially 
when simplification would occur at their expense," Mr. Hawke added.

"A second reason why our structure has remained in place is that the U.S. 
regulatory agencies, through trial and error, have learned to work effectively 
within it," Mr. Hawke said.

Competition among the agencies is the strength of the system.

"I believe that the relationships that exist among U.S. supervisors validate the 
concept that lies at the heart of our structure – that competition among regulatory 
agencies can enhance the quality of supervision and help prevent it from becoming 
unduly burdensome for financial institutions," Mr. Hawke said.

Ultimately, Mr. Hawke said, the U.S. system reflects America. Other nations follow 
their own paths.

"The final and perhaps most important reason why our regulatory structure works is 
that it is an authentic reflection of our country's habits of mind and practice," 
he said. "While international experience suggests certain core principles of effective 
bank supervision – independence being chief among them – every country must find its own 
way of implementing those principles, in a manner consistent with its own culture and 
institutions."   
 
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The OCC charters, regulates and examines approximately 2,200 national banks and 52 federal 
branches of foreign banks in the U.S., accounting for more than 54 percent of the nation's 
banking assets. Its mission is to ensure a safe and sound and competitive national banking 
system that supports the citizens, communities and economy of the United States.