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Bank Supervision: FDIC Could Better Address Regulatory Capture Risks

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Report Type Reports and Testimonies
Report Date Sept. 4, 2020
Release Date Sept. 4, 2020
Report No. GAO-20-519
Summary:

"Regulatory capture" is when regulators act in the interest of the regulated industry, rather than in service of the public good. This can be a problem in banking regulation, where regulators may be swayed by future job offerings and more.

We found that the Federal Deposit Insurance Corporation has several policies for documenting bank examination decisions, which can reduce the risk of regulatory capture. However, FDIC staff did not always clearly document their analysis of how banks addressed areas of concern identified during examinations.

We recommended that FDIC improve how it documents banks' progress at addressing FDIC's concerns.

FDIC

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