WASHINGTON (Reuters) - A top U.S. bank regulator said on Monday it will call on foreign peers to help assess its shortcomings after the 2007-2009 financial crisis, when it failed to spot major lapses at some of the biggest firms it oversees.
Regulators failed to detect grave mistakes banks made in the lead-up to the global crisis and in its aftermath, Comptroller of the Currency Thomas Curry said, and were therefore not able to force banks to fix those problems.
Top bank supervisors from Singapore, Australia and Canada will review the Office of the Comptroller of the Currency’s (OCC) oversight of the biggest U.S. banks to help root out flaws in bank supervision, Curry said.
“There is plenty of blame to go around for the problems we’ve seen in recent years... and some of it falls squarely on the shoulders of the regulatory agencies, including the OCC,” Curry said in remarks prepared for a conference.
Lawmakers and financial reform advocates assailed the OCC after the crisis for appearing too close to the banks it oversaw and for failing to spot the problems that led to the meltdown.
Later, the OCC came in for a storm of criticism of its handling of widespread home foreclosure errors by big banks and for seeming lax on anti-money laundering violations.
When JPMorgan Chase announced it had lost billions on derivatives trades gone wrong, critics said the agency looked asleep at the wheel for not seeing the losses coming. The OCC and other agencies last week announced nearly $1 billion in fines over the incident.
Curry, who was previously a director at the Federal Deposit Insurance Corp., set out to change the agency’s reputation when he joined the OCC in 2012.
On Monday, he said the OCC’s internal review would look at the culture at the agency, the way risks are identified, and any gaps that let bank problems go unspotted by regulators.
In addition to the peer review by foreign supervisors -- who hail from countries that Curry said weathered the financial crisis relatively well -- the OCC plans to scrutinize the work of each of its departments.
Curry said the inquiries would be structured like bank exams, beginning with a letter explaining the scope of the review and ending by sharing conclusions and tracking progress at each of the departments.
Departments where deficiencies are detected will get instructions to change, similar to those banks receive when the agency wants them to fix problems, Curry said. He said he could not give more detail because the project is in the early stages.
Reporting by Emily Stephenson; editing by Andrew Hay