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Keynote Remarks
by
Jelena McWilliams
Chairman, Federal Deposit Insurance Corporation
“The Future of Banking”
at
The Federal Reserve Bank of St. Louis
Tuesday, October 1, 2019
St. Louis, Missouri
Thank you for having me again this year. I am grateful to the St. Louis Fed, under the capable
leadership of Jim Bullard; CSBS; and the dedicated FDIC staff for putting together a great
conference.
When I addressed this conference last year, I had served in my role as FDIC Chairman for about
four months. So this year, you get what is hopefully an improved version of a keynote speech.
Last October, I discussed the FDIC’s efforts to strengthen trust among the agency, other
regulators, the public, and banks through transparency and accountability. I explained that
transparency is pivotal to maintaining trust in the safety and soundness of the entire banking
system.
As I pondered potential topics for this year’s conference, my thoughts kept coming back to a
simple question: “Why do regulators do what we do?”
At both the state and federal level, regulatory agencies have their missions. For the FDIC, those
missions include maintaining stability and public confidence in the nation’s financial system by
insuring deposits, examining and supervising financial institutions for safety and soundness and
Keynote Remarks
by
Jelena McWilliams
Chairman, Federal Deposit Insurance Corporation
“The Future of Banking”
at
The Federal Reserve Bank of St. Louis
Tuesday, October 1, 2019
St. Louis, Missouri
Thank you for having me again this year. I am grateful to the St. Louis Fed, under the capable
leadership of Jim Bullard; CSBS; and the dedicated FDIC staff for putting together a great
conference.
When I addressed this conference last year, I had served in my role as FDIC Chairman for about
four months. So this year, you get what is hopefully an improved version of a keynote speech.
Last October, I discussed the FDIC’s efforts to strengthen trust among the agency, other
regulators, the public, and banks through transparency and accountability. I explained that
transparency is pivotal to maintaining trust in the safety and soundness of the entire banking
system.
As I pondered potential topics for this year’s conference, my thoughts kept coming back to a
simple question: “Why do regulators do what we do?”
At both the state and federal level, regulatory agencies have their missions. For the FDIC, those
missions include maintaining stability and public confidence in the nation’s financial system by
insuring deposits, examining and supervising financial institutions for safety and soundness and
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consumer protection, making large and complex financial institutions resolvable, and managing
receiverships. We implement these missions through multiple regulatory, supervisory, and
enforcement channels. Not to oversimply the critical and often complex work of our regulatory
agencies, but once we fulfill those missions, we should ask, “Why do we do what we do?”
The FDIC was created in 1933 to protect bank depositors and ensure a level of trust in our
banking system as our nation emerged from the Great Depression. In order to ensure that public
trust in our financial institutions exists, we have to make sure that banks are safe and sound.
The basic tenets of safety and soundness focus on capital, liquidity, assets, bank management,
earnings, and the banks’ ability to manage risk. A safe and sound bank is able to withstand
market shocks and survive. It is the ability of banks to survive and thrive that is the focus of my
speech today.
“Video Killed the Radio Star”
To illustrate what I mean by survival, I will highlight the story of a company that was once a
behemoth in its industry. Because I have been told by my capable staff not to mention any bank
by name, this story is not about a bank. It is, in fact, about Blockbuster.
Blockbuster had thousands of retail locations, millions of customers, a sizeable marketing
budget, and a successful business model. In 2000, a little start-up proposed a deal to
Blockbuster: the start-up would run Blockbuster’s brand online and Blockbuster would promote
the start-up’s mail-order rentals in its stores. Blockbuster declined. It also declined an
opportunity to buy the start-up for $50 million.
You know where I am going with this story. Blockbuster has since filed for bankruptcy. The
one remaining store in Portland, Oregon, is a vestige of a bygone era.
consumer protection, making large and complex financial institutions resolvable, and managing
receiverships. We implement these missions through multiple regulatory, supervisory, and
enforcement channels. Not to oversimply the critical and often complex work of our regulatory
agencies, but once we fulfill those missions, we should ask, “Why do we do what we do?”
The FDIC was created in 1933 to protect bank depositors and ensure a level of trust in our
banking system as our nation emerged from the Great Depression. In order to ensure that public
trust in our financial institutions exists, we have to make sure that banks are safe and sound.
The basic tenets of safety and soundness focus on capital, liquidity, assets, bank management,
earnings, and the banks’ ability to manage risk. A safe and sound bank is able to withstand
market shocks and survive. It is the ability of banks to survive and thrive that is the focus of my
speech today.
“Video Killed the Radio Star”
To illustrate what I mean by survival, I will highlight the story of a company that was once a
behemoth in its industry. Because I have been told by my capable staff not to mention any bank
by name, this story is not about a bank. It is, in fact, about Blockbuster.
Blockbuster had thousands of retail locations, millions of customers, a sizeable marketing
budget, and a successful business model. In 2000, a little start-up proposed a deal to
Blockbuster: the start-up would run Blockbuster’s brand online and Blockbuster would promote
the start-up’s mail-order rentals in its stores. Blockbuster declined. It also declined an
opportunity to buy the start-up for $50 million.
You know where I am going with this story. Blockbuster has since filed for bankruptcy. The
one remaining store in Portland, Oregon, is a vestige of a bygone era.