Just a year and a half ago, the Silicon Valley Bank unexpectedly collapsed, causing billions of dollars in losses and stoking fears that America's banking system wasn't as stable and secure as we thought.
In spite of that, the Trump administration is toying with the idea of curtailing banking regulations.
The Wall Street Journal reports that the transition team is exploring ways to dramatically shrink, consolidate, or even eliminate the top bank watchdogs in the federal government. Sultan Meghji, who served as chief innovation officer at the FDIC, told KNX News’ daily political show Countdown 2024 it isn’t entirely a bad idea.
Listen here:
“We actually have two parallel banking systems here in the United States. We have one focused on banks that are chartered at the state level. And then we have another that's focused on chartering at the federal level. And so at a minimum, you have in many cases, duplicative work.”
He said there are currently close to 40,000 people employed at banking regulators across the country, and much of their day-to-day workflow “predates fax machines.” If the system is modernized by switching from manual paperwork to Excel spreadsheets, for example, a significant portion of the workforce could be dropped.
“It also would really decrease the overall risk to the banking system and remove a lot of human error, and it would allow us to get in front of bank failures like the Silicon Valley Bank collapse,” he said.
But Meghji said the tech upgrade could have unintended consequences.
“A lot of the technologists that are good at building these kinds of technologies don't work for the US government and aren't federal, you know, technology contractors,” he said. “And so there's a tremendous risk of putting in a bunch of unproven technology inside of a regulatory system that in many cases hasn't been updated for a century.”
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Listen to the full episode above to hear from pediatrician Dr. Julia Mason about her opinion on gender-affirming care for minors, and catch new episodes of Countdown 2024 every weekday at 2:30 p.m.
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