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In the Media
| April 2013
Money Beat: ‘A Dose of Healthy Competition’ for Banking Regulators
By Dan Fitzpatrick
The Wall Street Journal, April 18, 2013. All Rights Reserved.
New York Department of Financial Services Superintendent Benjamin Lawski signaled in a speech Thursday that he will not shy away from taking the “lead” among regulators while confronting U.S. financial giants.
Lawsky rankled other regulators last year when he pursued a money laundering case against British bank Standard Chartered that ended with a settlement of $340 million. His agency, which serves as New York’s top banking regulator, was less than a year old at the time.
“A dose of healthy competition among regulators is helpful and necessary to safeguarding the stability of our nation’s financial system,” Lawsky told a crowd in New York gathering for the Hyman P. Minsky Conference on the State of the U.S. and World Economies.
During his talk Lawsky dropped hints about new lines of inquiry for his department. He mentioned a trend of private equity companies buying insurance companies; the use of captive insurance subsidiaries to shift risk and take advantage of looser oversight requirements; and the use of outside consultants to monitor bank abuses.
“The monitors are hired by the banks, they’re embedded physically at the banks, they are paid by the banks and they depend on the banks for future business,” he said.
Lawsky said to expect actions in “the coming weeks and months” on the consultancy issue. “We expect that those actions will help propel reform at both the state and federal levels.”
New York Department of Financial Services Superintendent Benjamin Lawski signaled in a speech Thursday that he will not shy away from taking the “lead” among regulators while confronting U.S. financial giants.
Lawsky rankled other regulators last year when he pursued a money laundering case against British bank Standard Chartered that ended with a settlement of $340 million. His agency, which serves as New York’s top banking regulator, was less than a year old at the time.
“A dose of healthy competition among regulators is helpful and necessary to safeguarding the stability of our nation’s financial system,” Lawsky told a crowd in New York gathering for the Hyman P. Minsky Conference on the State of the U.S. and World Economies.
During his talk Lawsky dropped hints about new lines of inquiry for his department. He mentioned a trend of private equity companies buying insurance companies; the use of captive insurance subsidiaries to shift risk and take advantage of looser oversight requirements; and the use of outside consultants to monitor bank abuses.
“The monitors are hired by the banks, they’re embedded physically at the banks, they are paid by the banks and they depend on the banks for future business,” he said.
Lawsky said to expect actions in “the coming weeks and months” on the consultancy issue. “We expect that those actions will help propel reform at both the state and federal levels.”
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