During his nomination hearing to serve as comptroller of the currency today, Jonathan Gould emphasized that banks “must be allowed to engage in prudent risk-taking” if the U.S. economy is to remain robust and dynamic.
“In the years since 2008, bank regulators have at times tried to eliminate rather than manage risk, frustrating the ability of banks to fulfill their function,” said Gould, the former chief counsel at the OCC. “This blinkered approach to risk management has implications for the cost and availability of credit, the system’s ability to absorb shocks, and its adoption of new technologies and embrace of innovation.”
In response to questions on reputation risk — which the OCC recently removed from the scope of bank supervision — Gould said he agreed with Acting Comptroller Rodney Hood’s decision. “I think too often reputation risk is used as a pretext for other motives, and I think the regulators have at their disposal other forms of more easily quantifiable and just better understood, more precise, more objective terms.”
