WASHINGTON — Comptroller of the Currency Tom Curry defended the use of on-site examiners as part of the agency's supervision program in a speech to the Financial Services Roundtable on Thursday.
Responding to recent criticism about the value of embedding examiners at large banks, Curry said that during the financial crisis, the OCC's on-site examiners "knew where the weaknesses were" and began putting capital and liquidity agreements in place in some institutions well before stress testing started.
"We were able to do that precisely because we had teams of examiners working continuously on-site in those institutions," he said.
"Stress testing is only one tool, albeit an important one, and any suggestion that it might be a substitute for supervisory boots on the ground is simply wrong-headed," he later added.
Curry said the OCC is working to make supervision better by raising expectations for large banks, including heightened standards for boards of directors, compensation and risk tolerance.
The agency is also keeping a close eye on loan loss allowances, and ongoing weaknesses with operational risk management, especially at more complex institutions, he said.
"With so much uncertainty here and abroad, the industry needs to maintain strong reserves," Curry said.
