OCC says comptroller attacked unfairly after London speech
The Office of the Comptroller of the Currency is defending Acting Comptroller John Walsh from attacks levied by senators who claim Walsh gave a speech criticizing new capital requirements for banks. In response, the OCC released a statement, suggesting the senators took Walsh's speech out of context. "The speech delivered by the Acting Comptroller Walsh did not urge a reduction in capital," a spokesman for the OCC said. "In the speech, Mr. Walsh supported increased capital requirements and has said so on record. The speech urged caution about the cumulative effect of many new requirements and about going too far to a point where restrictions inhibit banks from meeting the credit needs of citizens, communities and businesses which are central to a vibrant economy." What the debate really shows is the line of demarcation separating regulation from too-much-regulation is about to become a steamy topic in the power corridors of Washington, D.C. The controversy began when Democratic Sen. Jeff Merkley, (D-Ore.), asked President Obama to appoint a new Comptroller of the Currency on the grounds that John Walsh gave a speech arguing in Merkley's words "for (the) minimal capital standards and lax regulation that brought down our entire economy in 2008." But according to the OCC, the speech Walsh gave to a London crowd this week tells a different story. In one excerpt from the actual speech, Walsh says, "Specifically, I want to urge due caution regarding the cumulative effects of all the contemplated changes. I might have titled these remarks: Beware the pendulum." Walsh goes on to say, "I should start by making it very clear that I support strong capital and strong liquidity for banks, and enhanced supervision of systemically important institutions." After making his case for capital requirements, Walsh warned against excessive regulation, suggesting that new rules should consider "the critical role of banks in promoting strong and sustainable economic growth." Write to: Kerri Panchuk.