Supervisory Enforcement Actions Since FIRREA and FDICIA - In Brief

Regulatory Restraint

In response to banking crises in the 1980s, Congress passed two laws that expanded enforcement powers of financial institution supervisors, including the Federal Reserve. At the time, some observers warned that these new powers would be misused.

A careful analysis of enforcement actions taken over the past 15 years indicates that these concerns were unwarranted. The number and severity of enforcement actions generally track supervisors' assessments of banking conditions. And in a period characterized by solid earnings in the financial industry, enforcement activity has been focused largely on risk management, compliance and similar issues.

Supervisory Enforcement Actions Since FIRREA and FDICIA [complete article]