Last summer, the New York Department of Financial Services (DFS) burst into the regulatory spotlight by wresting a historic $340 million money-laundering fine from Standard Chartered Bank. Now, nearly a year later, there are plenty of good reasons to pay plenty of attention to this zealous regulatoras Jones Day points out via Harvard Law Schools corporate governance blog.
Given DFSs aggressive posture, its willingness to examine new issues, and its desire to establish precedents for other regulators and prosecutors to follow, banks, insurers, and other financial institutionsboth in and outside New Yorkshould keep DFS and its activities in view, the law firm memo [PDF] says.
Formed in late 2011 by the merger of two existing state agencies, DFS is led by Superintendent Benjamin Lawsky, who gave a speech last month on the agencys priorities and guiding philosophy. Between Lawskys remarks and Jones Days analysis, here are three things to note as DFS hits its one-year milestone:
1. The agencys desire to foster healthy competition among regulators
With Standard Chartered, DFS certainly demonstrated it wasnt afraid to break away from the regulatory pack and pursue a case aggressively. At the time, unnamed government sources grumbled to the media about DFSs approach.
Lawsky doesnt apologize for thatand in fact thinks competition among regulators cuts down on complacency and institutional inertia, according to his speech.
A dose of healthy competition among regulators is helpful and necessary to safeguarding the stability of our nations financial system, he said. Not just todaybut for the long term.
2. How federal regulators are taking notice
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