On September 3, Acting Comptroller of the Currency Michael J. Hsu delivered remarks on the evolution of bank supervision at a recent international conference, focusing on the transformation of bank supervision over the last decades and the critical role it plays in maintaining the stability of the financial system. Noting that effective supervision requires consistent effort, and its impact accumulates over time, Hsu underscored the vital role that supervisors play in safeguarding the banking system, although supervision is often invisible to the public unless something goes wrong such as a bank failure. Hsu also noted that, while the number of bank charters has decreased, there has been a significant growth in the size and complexity of banks over the past decades — with total assets for banks surging from $800 billion to over $17 trillion. Coupled with the rising importance of nonfinancial risks, including cyber and operational risks, Hsu called for “a more nimble and integrated supervisory approach,” for global systemically important banks.

Looking forward, Hsu stressed the importance of risk-based supervision that prioritizes critical areas and the need for supervisory agility and credibility. Hsu concluded by focusing on the OCC’s efforts to collaborate with domestic and international counterparts and adapt to the changing bank landscape.