Remarks by
Jelena McWilliams
Chairman
Federal Deposit Insurance Corporation
at the
Institute of International Bankers
Annual Washington Conference
Washington, D.C.
March 11, 2019
____________________________________
Thank you for the invitation to speak here this afternoon. The list of topics and speakers at
today’s event is rather impressive, and I welcome the opportunity to engage and share my views.
To say that the financial system is interconnected on a global scale would be an understatement.
The largest U.S. banks operate in well over a hundred countries, while many foreign banks
operate in the United States, often through regulated, FDIC-insured depository institutions.
These foreign banking organizations provide financial services across a range of business lines
and products in the U.S., from consumer lending to small business lending to financing
infrastructure projects. While this extensive cross-border activity presents certain challenges,
especially when it comes to potential resolutions, it also provides meaningful benefits to U.S.
Jelena McWilliams
Chairman
Federal Deposit Insurance Corporation
at the
Institute of International Bankers
Annual Washington Conference
Washington, D.C.
March 11, 2019
____________________________________
Thank you for the invitation to speak here this afternoon. The list of topics and speakers at
today’s event is rather impressive, and I welcome the opportunity to engage and share my views.
To say that the financial system is interconnected on a global scale would be an understatement.
The largest U.S. banks operate in well over a hundred countries, while many foreign banks
operate in the United States, often through regulated, FDIC-insured depository institutions.
These foreign banking organizations provide financial services across a range of business lines
and products in the U.S., from consumer lending to small business lending to financing
infrastructure projects. While this extensive cross-border activity presents certain challenges,
especially when it comes to potential resolutions, it also provides meaningful benefits to U.S.
2
consumers and businesses and to the broader U.S. economy. Our regulatory framework should
be responsive to this reality.
Today, I’m going to discuss a few issues that we have been working on at the FDIC that might
be relevant for the audience today, starting with the Volcker Rule.
Volcker Rule
The Volcker Rule was passed as part of the Dodd-Frank Act in 2010. While we may all have our
own views on the underlying concept, the Volcker Rule is the law of the land, and as a result we
must faithfully implement its provisions as the statute requires.
The rule was finalized five years ago, in December 2013, by five agencies – the FDIC, Federal
Reserve, Office of the Comptroller of the Currency (“OCC”), Securities and Exchange
Commission, and the Commodity Futures Trading Commission. Compliance with the rule has
been challenging, to say the least, with many requirements that are extremely complex and
overly subjective. While we may not all agree on the ultimate destination, there seems to be
broad consensus that changes and adjustments to the rule are needed.
Personally, I have witnessed first-hand the challenges of implementing the Volcker Rule: first as
a staffer on the Senate Banking Committee as the agencies drafted the rule, and subsequently as
general counsel of a regional U.S. bank. As the agencies were promulgating the rule, it became
clear that navigating the potential for unintended consequences would be akin to walking
through a mine field. As the general counsel, I encountered that mine field when the bank was
looking to invest in clean energy credits: a team of two dozen employees from various
departments within the bank and an outside counsel invested hours in making sure that
consumers and businesses and to the broader U.S. economy. Our regulatory framework should
be responsive to this reality.
Today, I’m going to discuss a few issues that we have been working on at the FDIC that might
be relevant for the audience today, starting with the Volcker Rule.
Volcker Rule
The Volcker Rule was passed as part of the Dodd-Frank Act in 2010. While we may all have our
own views on the underlying concept, the Volcker Rule is the law of the land, and as a result we
must faithfully implement its provisions as the statute requires.
The rule was finalized five years ago, in December 2013, by five agencies – the FDIC, Federal
Reserve, Office of the Comptroller of the Currency (“OCC”), Securities and Exchange
Commission, and the Commodity Futures Trading Commission. Compliance with the rule has
been challenging, to say the least, with many requirements that are extremely complex and
overly subjective. While we may not all agree on the ultimate destination, there seems to be
broad consensus that changes and adjustments to the rule are needed.
Personally, I have witnessed first-hand the challenges of implementing the Volcker Rule: first as
a staffer on the Senate Banking Committee as the agencies drafted the rule, and subsequently as
general counsel of a regional U.S. bank. As the agencies were promulgating the rule, it became
clear that navigating the potential for unintended consequences would be akin to walking
through a mine field. As the general counsel, I encountered that mine field when the bank was
looking to invest in clean energy credits: a team of two dozen employees from various
departments within the bank and an outside counsel invested hours in making sure that