By opening its own ‘innovation office,’ FDIC will become third agency to do so (after OCC, BCFP)

An “innovation office” is in the future for the federal insurer of bank deposits, the agency’s leader told a banking conference Tuesday, signaling the latest regulator to develop such an office.

Federal Deposit Insurance Corp. (FDIC) Board Chairman Jelena McWilliams told participants at the American Bankers Association’s (ABA) annual convention in New York that the innovation office will focus on helping bankers “stay on the technological forefront,” ABA Banking Journal, a publication of the trade group, reported Tuesday.

The FDIC foray into an “innovation office” follows efforts of both the Office of the Comptroller of the Currency (OCC) and Bureau of Consumer Financial Protection (BCFP). The OCC announced its “responsible innovation” initiative last fall; the BFCP announced its innovation office in July.

McWilliams told the bankers that when financial innovation happens outside of the regulated banking sector, it becomes harder to understand broader systemic risk, according to the Journal. “We can’t talk about financial stability or systemic risk without looking at the system as a whole,” she said.

In other comments, McWilliams said her agency would by year’s end issue a notice of proposed rulemaking on the leverage ratio for highly capitalized banks, the Journal reported.

 

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