Reputational risk did not forecast failures, Preston Byrne argues

Reputational risk did not forecast failures, Preston Byrne argues
Reputational risk not key in bank oversight

Preston Byrne highlights a policy shift regarding U.S. bank supervision. He notes that changes originally introduced by Brian Brooks when he served as OCC Comptroller were later reversed by the Biden administration.

Byrne points out that studies have demonstrated reputational risk is not a reliable predictor of bank failures and supports its exclusion from considerations in bank oversight.

Byrne has previously addressed regulatory differences in global financial markets. In May, he warned that the UK and U.S. are unlikely to have regulatory compatibility on digital assets by 2027 following Labour's 2024 win, according to his analysis of UK-U.S. crypto divergence. His commentary has focused on the practical impacts of policy changes in both jurisdictions.

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