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| High rise building Photo by Floriane Vita on Unsplash |
Sujey Kallumadanda is an established presence in the Houston legal community who has a focus on domestic and international law. Among Sujey Kallumadanda’s areas of extensive knowledge is US banking and securities law, and he follows current developments in the field.
A recent Brookings Institute article brought focus to America’s bank supervision system and the issue of confidential supervisory information (CSI), which keeps relevant information from the public. Under existing laws, regulators can exclude from public exposure nearly any aspect of the system relevant to the supervision and regulation of financial institutions. This broad mandate is used to effectively prevent public accountability of major bank supervisors.
American consumers are deemed a major victim of this situation, as they are often the last to know in cases of fraudulent and discriminatory activity designed to maximize bank revenue. Even when revealed in bank examinations, such practices can be kept from public disclosure.
Another party often left in the dark under CSI rules is investors, who may not have vital information about the health of major banks that would allow them to accurately value the financial institutions’ underlying securities. A key question raised in the article asks why securities regulation standards for large banks are vastly different from those covering other corporate participants in the public capital markets.
