By Rob Starr, Big4.com Content Manager
Her 12 years at the Board of Governors of the Federal Reserve saw Bailey ascend to the role of Deputy Director of the Division of Banking Supervision and Regulation in 2006, where she reported directly to Benjamin Bernanke, chairman of the Federal Reserve at the time. Her other accomplishments include 24 years in the Office of the Comptroller of Currency and a time as vice chairman and managing director at Deloitte, where she led the financial services regulatory practice for banking and securities. Bailey’s addition furthers KPMG’s continued investment in expanding its Regulatory practice across all financial services sectors. Our interview also included responses from John Ivanoski, Partner and National Leader for KPMG LLP’s Financial Services Regulatory Practice.
How will your work with the Federal Reserve help you in your new role? “As Deputy Director of the Division of Banking Supervision and Regulation, I was afforded the opportunity to work with and report directly to the Ben Bernanke, former Chairman of the Federal
Reserve during the 2008/2009 financial crisis. I had a front row seat to some of the compliance, risk management and data and analytical challenges and issues that contributed to the financial crisis. More importantly, I played an active role in developing policies and implementing supervisory tools and practices, such as stress testing, which the current and future approach to supervising large systemically important financial institutions is based upon. I am able to draw upon the experience and knowledge I gained at the Federal Reserve to help KPMG LLP clients to meet current and prospective regulatory requirements and implement them in a way that aligns with the clients’ business goals and increases shareholder value.” – Deborah Bailey, Managing Director in KPMG LLP’s Regulatory Risk Service Network In what areas are evolving regulations causing the biggest challenges for KPMG’s clients? “The wave of complex regulatory changes and surge in compliance costs has intensified the need for financial institutions to focus on the transformation of risk management and regulatory compliance activities. A key regulatory challenge driving this need for transformation is the expansion of global regulatory reporting requirements, transnational regulatory cooperation and continued supervisory scrutiny related to systemic reporting such as new bank regulatory requirements for capital, liquidity and stress testing. Financial institutions must also transform risk management and compliance processes in response to regulatory pressures for heightened prudential standards and the need to enhance governance frameworks. Also spurring this need for transformation are expectations for more effective compliance and surveillance programs, including proactive risk analytics as well as challenges associated with risk data aggregation and data quality.” – John Ivanoski, Partner and National Leader for KPMG LLP’s Financial Services Regulatory Practice How is KPMG looking to bolster its regulatory capabilities? “Over the past two years, KPMG LLP has invested heavily in expanding its financial services regulatory capabilities and resources, roughly doubling the size of our Regulatory Risk service network by attracting knowledgeable former regulators and industry practitioners. The firm has made it a strategic priority to develop transformative solutions designed to address the complex regulatory compliance issues I earlier described. These solutions are designed for areas such as capital management and liquidity, regulatory change management, enhanced governance and risk frameworks, regulatory reporting and data analytics. We have also established a Regulatory Center of Excellence that scans the horizon for new and emerging regulation and provides thought leadership and practical insights for our clients.” – John Ivanoski What challenges /opportunities are you looking forward to? “Challenges present the right environment for opportunities. Clearly there are challenges to meet the increasing regulatory demands related to areas such as corporate governance, risk management, capital and liquidity management, technology and data and information management requirements. I am thrilled to have the opportunity to work with other very talented professionals at KPMG to guide U.S. and foreign banking and securities firms to address regulatory issues in a way that fill strategic gaps in customer, product, and geographic portfolios. The goal is to position our clients for growth, improved risk and compliance management, and enhanced operational effectiveness. The key is optimizing returns in today’s regulatory environment, while effectively managing regulatory change.” – Deborah Bailey What do you see in the future? “The pressure to meet regulatory requirements while creating operating efficiencies will continue. Regulatory change presents challenges, but can also provide opportunities if a financial institution has the right strategy in place. I am excited to be at KPMG to explore with our clients better and more effective ways to manage regulatory change. Organizations that can align their risk management and regulatory compliance activities to their business strategies will be at a competitive advantage. Our focus is to provide strategic solutions that help our clients navigate through complex global regulatory changes from business impact assessment to practical implementation.” – Deborah Bailey