Like the rest of you, we have increasingly emphasized the importance of risk-focused examinations and of avoiding a checklist approach to examinations. The agencies here must work together to assure that we can better draw the distinction between what we see as problems and what we do not see as problems. In this exercise, different points of view enhance perspective, but we need to make sure we come together after all the issues are resolved to assure consistency in banking supervision. The fourth element in steering a moderate course is to stick to basic principles of bank supervision both in good times and in tough times. It is a mistake to assume that smaller institutions are inherently less in need of regular and routine on-site examinations simply because they are small and not as complex.
Small banks deserve our supervision and guidance as much as large banks do.
I have talked with a number of bankers in smaller institutions who tell me that they become uncomfortable if too much time lapses between examinations. Another basic principle of bank supervision is that care should be given in chartering new banks. Soon after Bill Taylor became Chairman of the FDIC, he visited our New York regional office in connection with the resolution of a savings institution. They took the subway instead. When I visited our New York office for the first time, Nick Ketcha also took me on the subway.