Randal K Quarles: The eye of providence - thoughts on the evolution of bank supervision

Speech (via webcast) by Mr Randal K Quarles, Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, at the Federal Reserve Board, Harvard Law School, and Wharton School Conference "Bank Supervision: Past, Present, and Future" 11 December 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Torrential thanks to our partners Harvard Law School and The Wharton School for organizing this conference, and to the Federal Reserve staff who have played a key role. And an equally huge thanks to all of the moderators and panelists who are participating in today's event and to all of you who are tuning in. I have very much enjoyed the discussion so far, and I hope that the conference will encourage both more and a wider variety of academic work on bank supervision.

In many respects, the focus of today's conference on bank supervision, rather than regulation, and the relatively recent efflorescence of scholarly attention to that topic, are welcome new developments. In other respects, however, the question of the proper scope of bank supervision is not a new topic at all. In going through some family papers recently, I came across this cri de coeur from one Elton Hall, president of a small bank in Victor, Idaho, as quoted in the Teton Valley News in November, 1921:

The government has so governed [my] bank that [I] no longer knew who owned it. I am inspected, examined and re-examined, informed, required, restrained, and commanded. . . . I am supposed to be an inexhaustible supply of money . . . , and because I will not sell all I have and go out and beg, borrow, or steal money to give away, I have been cussed, discussed, boycotted, talked to, talked about, lied to, lied about, held up, hung up, robbed and nearly drained, and the only reason I am clinging to life is to see what in hell is coming off next.