What Does “Too Big To Manage” Mean For Banks?

In a recent American Banker op-ed, Keith Noreika, Executive Vice President at Patomak Global Partners and former US Acting Comptroller of the Currency, takes issue with recent arguments made by the current Acting Comptroller, Michael Hsu, that repeated misconduct issues may suggest some firms have grown “too big to manage” (TBTM).

Hsu's speech was not specific in defining an exact meaning of TBTM, Noreika notes, suggesting that perhaps a better phrase would be “too complex to manage.”  It is not the size of a firm that determines its manageability, Noreika contends.  Some large firms can be quite simple to manage, while some smaller but highly complex firms may prove unwieldy.  Without greater clarity in this regard, Noreika laments, bank leaders must contend with "regulatory speak” which complicates their ability to set management priorities successfully.