The convention theme, “Creating Sustainable Competitive Advantage,” is well chosen for an industry that continues to be characterized by dramatic change. This morning I should like to address one aspect of response to change – the evolution of bank supervision. As the theme of your convention suggests, the economic landscape is continually evolving. To remain competitive, individual banks must adapt, and they have.
It is no less natural to expect that supervisory policies and practices also would evolve and adapt over time. Banking supervision is responding, though admittedly not as rapidly as the industry itself. This is not necessarily all bad. The physician’s admonition “First do no harm” is a desirable starting point for bank supervisors as well. Nevertheless, significant changes are in the pipeline.