Federal regulators need to build a better mousetrap to ensure “healthy” bank mergers are approved while “unhealthy” mergers are rejected, an official with the Office of the Comptroller of the Currency said today during an agency symposium. about the topic. OCC Lead Counsel Ben McDonough—delivery of prepared comments on behalf of Acting Comptroller Michael Hsu, who was unable to attend — reiterated the agency leadership’s belief that the framework for analyzing bank mergers needs an update. Multiple banking industry and policy experts spent the day sharing their research and opinions on mergers.
“There is a robust ongoing debate about the effects of bank mergers on competition, on American communities and on financial stability,” McDonough said. “At the same time, many experts have raised questions about the continued adequacy of current bank merger standards at a time of intense technological and societal change.”
McDonough added that without regulatory reform, “there is a greater risk of approving mergers that lessen competition, harm communities, or present systemic risks. Similarly, a moratorium on mergers would lock down the status quo and inhibit growth and improvements that could help communities and increase competition.” He did not provide any examples of regulatory reforms the OCC would pursue, saying the symposium was meant to advance the discussion. “In our experience, sometimes it takes in-person brainstorming to galvanize us into action,” he said.
