8 th Annual Risk Conference Panel 2: Regulatory Policy Moderator • Lamont Black , Assistant Professor of Finance, Driehaus College of Business, DePaul University Panelists • Anthony Gibbs , Midwest Regional Director, Consumer Financial Protection Bureau • Jame Sloan , Director, Promontory Financial Group • Leonard Wiatr , Executive Managing Director & Chief Risk Officer, PrivateBank • Connie Horsley , Assistant Director, Bank Supervision & Regulations, Board of Governors of the Federal Reserve System
Panel 2: Regulatory Policy Lamont Black • “Reaffirming Our Foundations: Risk & Regulation , Culture & Governance ” • A mix of regulators, consultants, & bankers • Major focus in the post-crisis era – Safety and soundness – Consumer compliance
Regulatory Policy • “Reaffirming Our Foundations: Risk & Regulation , Culture & Governance ” • A mix of regulators, consultants, & bankers • Major focus in the post-crisis era – Safety and soundness – Consumer compliance
Regulatory Policy 1. Capital Ratios vs. Stress Tests 2. Consumers Bright Lines vs. Judgment 3. Rules Simplicity vs. Complexity 4. Bank Size Uniformity vs. Diversity
RE GUL AT ORY CHANGE MANAGE ME NT Pr e par e d for F e de r al Re se r ve Bank Annual Risk Confe r e nc e MARCH 31, 2015 L e o na rd Wia tr, Chie f Risk Offic e r Re g ula to ry Cha ng e
T he Priva te Ba nk a nd T rust Co mpa ny $15.6B I llino is sta te c ha rte re d no n-me mb e r b a nk re g ula te d b y the • F e de ra l De po sit I nsura nc e Co rpo ra tio n (F DI C) a nd I llino is De pa rtme nt o f F ina nc ia l a nd Pro fe ssio na l Re g ula tio n (I DF PR) Ho lding c o mpa ny is re g ula te d b y the F e de ra l Re se rve Ba nk o f • Chic a g o Co mme rc ia l Ba nk with 33 stra te g ic a lly lo c a te d o ffic e s prima rily in • the Midwe st se rving the g re a te r Atla nta , Chic a g o , Cle ve la nd, De nve r, De s Mo ine s, De tro it, Gra nd Ra pids, K a nsa s City, Milwa uke e , Minne a po lis a nd St. L o uis me tro po lita n a re a s Spe c ia lize d le nding to middle -ma rke t c o mme rc ia l c lie nts with nic he • a re a s inc luding he a lthc a re , se c urity a la rm fina nc e , c o mme rc ia l a nd industria l, a nd a sse t-b a se d le nding Re g ula to ry Cha ng e 6
Spe a ke r Bio g ra phy L e n Wia tr jo ine d T he Priva te Ba nk a nd T rust Co mpa ny in 2008. He se rve s a s the Ba nk’ s Chie f Risk Offic e r, o ve rse e ing Co mplia nc e a nd Ope ra tio na l Risk a s we ll a s Cre dit Re vie w. Prio r to jo ining T he Priva te Ba nk, L e n wa s the e xe c utive vic e pre side nt a nd c hie f c o mplia nc e o ffic e r a t L a Sa lle Ba nk Co rpo ra tio n a nd e xe c utive vic e pre side nt a nd de puty c hie f c o mplia nc e o ffic e r a t ABN AMRO No rth Ame ric a . Mr. Wia tr b e g a n his b a nking c a re e r in 1969 a s a na tio na l b a nk e xa mine r with the Co mptro lle r o f the Curre nc y. He le ft the re g ula to ry a g e nc y in 1981 to jo in the fo rme r F irst Na tio na l Ba nk, Chic a g o (no w JP Mo rg a n Cha se ) a s se nio r le nding o ffic e r fo r L a tin Ame ric a re spo nsib le fo r ma na g ing the Ba nk's L a tin Ame ric a n lo a n po rtfo lio . Mr. Wia tr re turne d to the Co mptro lle rs o ffic e in 1984, rising thro ug h the ra nks to b e c o me e xa mine r-in-c ha rg e in the la rg e b a nk supe rvisio n divisio n. He le ft in 2004 to jo in L a Sa lle . Mr. Wia tr e a rne d his B.S. in b usine ss a nd a dministra tio n fro m St. Jo se ph's Co lle g e . He is a lso a g ra dua te o f the Gra dua te Sc ho o l o f Ba nking , Unive rsity o f Wisc o nsin, Ma diso n. Re g ula to ry Cha ng e 7
Re g ula to ry Cha ng e : Sta te o f Pla y Ke y Disc ussion Points Re g ula to ry Driving F a c to rs • Ma na g ing Cha ng e • Do dd F ra nk I mple me nta tio n • Cha lle ng e s • Be st Pra c tic e s • Re g ula to ry Cha ng e 8
Histo ry o f Re g ula to ry Cha ng e Ba nking re g ula tio ns te nd to fo llo w, in a re a c tive fa shio n, so c io -e c o no mic e ve nts a nd o fte n e nsue pe rio ds o f de -re g ula tio n a nd/ o r funda me nta l shifts in ma rke t disc ipline a t b o th the institutio na l a nd inve sto r le ve ls. 1980s- 1990s – 2007- 2011 – 1920s – Gr e at Se pte mbe r 11, Savings & L oan F inanc ial De pr e ssion 2001 Cr isis Re c e ssion • Gla ss-Ste a g a ll Ac t • F ina nc ia l Institutio ns • Unite d a nd • Do dd F ra nk Wa ll • Cre a tio n o f Re fo rm, Re c o ve ry Stre ng the ning Stre e t Re fo rm a nd F e de ra l De po sit a nd E nfo rc e me nt Ame ric a b y Co nsume r Insura nc e Ac t (F IRRE A) Pro viding Pro te c tio n Ac t (~395 Co rpo ra tio n (F DIC) • F e de ra l De po sito ry Appro pria te T o o ls rule ma king Insura nc e Re q uire d to re q uire me nts; a ppx. Co rpo ra tio n Inte rc e pt a nd 231 fina lize d*) Impro ve me nt Ac t Ob struc t T e rro rism • Cre a tio n o f (F DICIA) (USA PAT RIOT Ac t) Co nsume r F ina nc ia l • Cre a tio n o f OT S Pro te c tio n Bure a u (CF PB) *As o f De c e mb e r 31, 2014. So urc e : Da vidPo lk Re g ula to ry Cha ng e 9
L a ndsc a pe T o da y’ s re g ula to ry c ha ng e s a re no t o nly de sig ne d to pro te c t the sa fe ty a nd so undne ss o f b a nks a nd the fina nc ia l syste m, b ut a re a lso inte nde d to pro te c t the e nd-use r c o nsume r. Satisfactory Ratings Mo rtg a g e L e nd ing & Stre ss T e sting Se rvic ing Compliance / Ba se l II I / Risk F a ir L e nd ing (HMDA)/ CRA Capital Consumer We ig hte d T IL A / RE SPA Protection Asse ts T itle VII- De riva tive s(e lig ib ility) BSA / OF AC F DI C, F RB, OCC, SE C, CF T C, CF PB, Sensitivity to Asset Management F inCE N, F I NRA, Market Risk I RS Prud e ntia l Ba se l II I / L CR Liquidity Management Sta nd a rd s Bro ke re d De po sit Inc e ntive Co mp. Earnings Re g ula to ry Cha ng e 10
Ma na g ing Cha ng e E ffe c tive ly T he b re a dth a nd sc o pe o f re g ula to ry c ha ng e c a n b e da unting , e spe c ia lly whe n a b a nk is sub je c t to re g ula to ry o ve rsig ht fro m multiple a g e nc ie s. E sta b lishing a nd ma inta ining a n e ffe c tive Co mplia nc e Risk Ma na g e me nt Pro g ra m is impe ra tive to the suc c e ss o f a Ba nk in this re g ula to ry e nviro nme nt: E sta b lish a nd c o mmunic a te Bo a rd a nd ma na g e me nt r isk appe tite • I nte g ra te c o mplia nc e into da y-to -da y line o f b usine ss pro c e sse s • Assig n c le a r ac c o untability fo r ne w a nd e xisting re g ula tio ns • E sta b lish a nd c o ntinua lly re info rc e c o mplianc e c ultur e • Re so lve c o mplia nc e issue s e ffe c tive ly a nd e xpe ditio usly • I mple me nt a n e ffe c tive c o mplia nc e tra ining pro g ra m to b uild a wa re ne ss • E sta b lish o pe n line o f c o mmunic a tio n with e xa mina tio n te a m • Pro vide se nio r ma na g e me nt a nd the Bo a rd with fre q ue nt a nd e ffe c tive • r e po r ting and r isk asse ssme nts Appo int kno wle dg e a b le a nd c o mpe te nt c o mplia nc e pro fe ssio na ls • inde pe nde nt o f the line o f b usine ss a nd pro vide to o ls a nd suppo rt fo r e ffe c tive o ve rsig ht o f re g ula to ry c ha ng e I mple me nt Inte r nal Audit a nd Co mplia nc e T e sting • Re g ula to ry Cha ng e 11
Ma na g ing Cha ng e E ffe c tive ly While a Ba nk’ s Co mplia nc e , Risk, a nd L e g a l de pa rtme nts ma y pla y a c ritic a l ro le in inte rpre ting a nd imple me nting re g ula to ry c ha ng e , a c c o unta b ility fo r c o mplia nc e risk must b e c le a rly a rtic ula te d: F ir st L ine of De fe nse (Busine ss Unit) •Ide ntify re g ula to ry c ha ng e impa c ting b usine ss a nd imple me nt ne c e ssa ry c ha ng e s to po lic y, pro c e dure s a nd c o ntro l •Ide ntify, mo nito r, ma na g e a nd mitig a te risks re sulting fro m ne w re g ula tio n •Pro mo te c o mplia nc e c ulture a nd e nsure a dhe re nc e thro ug h c o mpe nsa tio n a nd c o nsiste nt me ssa g ing Se c ond L ine of De fe nse (Complianc e ) •T ra c k a nd mo nito r pe nding re g ula to ry c ha ng e s •Co o rdina te c ha ng e ma na g e me nt with the b usine ss unit •Pro vide te sting to va lida te the e ffe c tive ne ss o f c ha ng e s a nd the susta ina b ility o f c o mplia nc e initia tive s •Ide ntify de fic ie nc ie s a nd wo rk with se nio r ma na g e me nt to mitig a te / re me dia te •L ia iso n with re g ula to ry a g e nc ie s T hir d L ine of De fe nse (Inde pe nde nt Audit) •E nsure re g ula to ry c ha ng e s ha ve b e e n ide ntifie d a nd inc o rpo ra te d into b usine ss •Mo nito r o ng o ing c o mplia nc e Re g ula to ry Cha ng e 12
Recommend
More recommend
