The UK government has published a policy paper UK-EU Memorandum of Understanding on Financial Services Cooperation which outlines the establishment of a new Joint EU-UK Financial Regulatory Forum (“the Forum”) to facilitate regulatory cooperation the EU commission and the UK government. The MoU, if signed, does not create rights or obligations under international or domestic law, nor will there be financial obligations resulting from its implementation. 

In a speech at the Texas Bankers Association Annual Convention, Michelle W Bowman, Governor at the Federal Reserve, has outlined three steps forward to facilitate improvements to banking regulation following the recent banking crisis. 

First, she recommended commissioning an independent third party to prepare a report on the failure of Silicon Valley Bank to supplement the ongoing internal review. This external report would help ensure accountability and address doubts that may arise from a self-assessment conducted by a single member of the Board of Governors. 

Second, Bowman emphasised the need to identify critical issues promptly and take swift action to address them. Supervisors and bank management, she said, must focus on key risk factors such as concentration risk, liquidity risk, and interest rate risk, rather than being distracted by novel activities. 

Third, she suggested considering necessary and targeted adjustments to banking regulation. This could involve deposit insurance reform, treatment of uninsured deposits, and reevaluation of current deposit insurance limits. However, Bowman cautioned against using bank failures as an opportunity for unrelated changes to banking regulation and stressed the importance of focusing on known issues and emerging problems. 

Bowman further warned against broad, fundamental reforms that deviate from tailoring and risk-based supervision, arguing that the unique nature and business models of the failed banks does not justify imposing overly complex regulatory expectations on a wide range of banks.  

In conclusion, Governor Bowman asserted that the banking system is strong and resilient, and policymakers should maintain a framework that supports a diverse banking sector and meets the needs of customers across the country. 

SEC announces new Legal and Regulatory Policy Director          

The Securities and Exchange Commission today announced that Mellissa Campbell Duru has been named Deputy Director for Legal and Regulatory Policy in the Division of Corporation Finance. Ms. Duru most recently was a Special Counsel at Covington & Burling LLP and previously spent more than 15 years in various SEC roles.  

“I’m pleased to welcome Mellissa back to the SEC in this important new role,” said SEC Chair Gary Gensler. “Mellissa’s wide-ranging experience will be an asset to the Commission’s work to ensure that investors have the fair, full, and truthful disclosure they need to make informed investment decisions.”