Communication with regulators is key for regulating foreign banks in the US, says Fed VP

Home regulators and foreign banks operating in the US must increase communication and collaboration to ensure smooth regulatory compliance, said the executive vice-president of the Federal Reserve Bank of New York, William Rutledge, speaking at the conference of state bank supervisors and the Institute of International Bankers in New York.

The Fed will share concerns of particular institutions with its home regulator, which may lead to “very explicit and public co-ordination of enforcement actions”, said Rutledge. Due to this, foreign firms are encouraged to maintain communication with regulators when problems arise.

Rutledge acknowledges that globalisation and financial innovation has led to increasing amounts of regulatory risk