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Former Regulator Now Has Banks' Back

NEW YORK (TheStreet) -- Eugene Ludwig was U.S. Comptroller of the Currency from 1993 to 1998 during the Clinton Administration, a period characterized by significant deregulation of the financial services industry. He later joined Deutsche Bank (DB) as vice chairman, before founding Promontory Financial Group in 2001.

A powerhouse consulting firm to the financial services industry, Promontory has advised clients including Citigroup (C), Countrywide Financial, prior to its acquisition by Bank of America (BAC), and Allied Irish Banks (AIB), according to BusinessWeek. Promontory also advised Morgan Stanley (MS) on its conversion to a bank holding company in 2008, according to a Morgan Stanley press release. Promontory will not identify its clients.

Eugene Ludwig

Ludwig is also managing partner of CapGen Financial, a financial services-focused private equity firm.

The following interview has been edited.

TheStreet:A lobbyist I spoke to believes you have an unfair advantage in that you are able to influence policy without having to register as a lobbyist yourself. What do you say to this?

Ludwig: Our job at Promontory is to help companies figure out how to implement rules, not engage in fruitless arguments about the wisdom of Congress' creating those rules. When government says we want a better compliance system, we try to figure out how to build a better compliance system within the rules. That's our business.

TheStreet:You are said to have an important role in shaping the financial reforms regulators are working on at the moment coming out of last year's Dodd Frank financial reform legislation. Please describe your role.

Eugene Ludwig: I testified before Congress several times on the Dodd-Frank bill. My views were my own; I was not representing anyone. As an ex-regulator, I felt it was my duty to express my own views. As a matter of good public policy the country would be much better off with a single regulatory agency in the banking space rather than multiple agencies. A single agency would have one set of rules, and financial institutions would not have to answer to multiple regulators with all the confusion and expense this entails. I said this when I was Comptroller of the Currency fifteen years ago, even though some of my colleagues in the OCC preferred the status quo. My view was accepted by Treasury, but not by the Congress where each agency had its own set of champions protecting its perceived interest.

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