Taylor Admits To a Weakness In Policing BCCI
WASHINGTON -- William Taylor, President Bush's nominee to run the nation's deposit insurance system, said bank regulators could have done a better job policing the Bank of Credit & Commerce International.</br></br>"I think we have learned a series of things," Mr. Taylor, currently the head of bank supervision at the Federal Reserve, told the Senate Banking Committee at his confirmation hearing.</br></br>"You shouldn't allow someone in the country that doesn't have supervision from a strong home-country supervisor," he said. BCCI, with operations in the Middle East, Africa, Europe and the U.S., fraudulently hid huge losses for months from regulators around the world. No U.S. depositors lost money.</br></br>Questions about BCCI's actions during Mr. Taylor's tenure at the Federal Reserve were expected to be the only serious hurdle to his confirmation. But committee members seemed satisfied with his remarks. Sen. Donald Riegle (D., Mich.), chairman of the committee, said that he expects the committee will recommend the confirmation and that the Senate will vote within a few weeks. If confirmed as expected, Mr. Taylor would succeed William Seidman, whose term expires next month.</br></br>In his testimony, Mr. Taylor said he remains troubled by lingering questions involving BCCI. In the U.S., BCCI was able to evade government prohibitions from purchasing stock in First American Bankshares Inc. by using frontmen. "I really have difficulty in knowing how we're going to uncover (such) arrangements anywhere," he said. "I really think it's difficult to determine when two people conspire to change the control of an organization."