WASHINGTON (MarketWatch) –Office of the Comptroller of the Currency Chairman John Walsh is becoming for Democrats what Elizabeth Warren has become for Republicans.

Republicans for several months have been foaming at the mouth when Democrat lawmakers raise the prospects of having the Obama administration nominate Harvard Law School Professor Elizabeth Warren to run a new consumer protection bureau responsible for regulating mortgages and other consumer credit products.

Now, increasingly, Democrats are calling for the Treasury Department to oust OCC Chairman John Walsh after comments he made in London Tuesday urging limits on regulatory efforts to hike capital requirements for the banks.

The battle between Walsh and some high-profile Democrats come as U.S. bank regulators are squabbling among themselves and with European regulators over capital requirements for big banks, whose failure could unsettle the markets.

Global regulators are grappling with efforts at requiring large, international, systemically significant financial institutions to hold additional capital beyond that required of other firms.

The Basel Committee on Bank Supervision, an intergovernmental organization charged with setting capital standards, is considering what that so-called capital surcharge should be.

Walsh, who joined the OCC in 2005, became acting Comptroller of the Currency in August, 2010. The OCC regulates large national banks.

At issue is a speech Walsh gave at the Center for the Study of Financial Innovation in London where he said “we are in danger of trying to squeeze too much risk and complexity out of banking as we institute reforms to address problems and abuses stemming from the last crisis.” Read Walsh's comments in London on bank capital

According to the speech, Walsh quoted a 2007 study that concluded that “there is widespread agreement in the theoretical academic literature that the immediate effects of constraining capital standards are likely to be a reduction in total lending and accompanying increases in market loan rates and substitution away from lending to holding alternative assets.”

On Thursday, Sen. Sherrod Brown, Democrat of Ohio, called on Treasury Secretary Geithner to oust Walsh insisting that his comments about bank capital were “troubling” and that he had “deeply flawed” beliefs.

“Wall Street [was] nearly brought down our economy three years ago in part by gambling with other peoples’ money,” Brown said. “Less debt and more equity will keep our banks on sound footing and ensure that credit is available to Main Street businesses and consumers. Mr. Walsh does not appear to understand this — and that is why he must be replaced as soon as possible.”

Brown’s comments came after Senate securities subcommittee chairman Jack Reed, Democrat of Rhode Island, on Wednesday took Walsh to task saying Walsh has “developed a dangerous case of amnesia-- seemingly forgetting that banks failed and didn’t have enough capital, forcing taxpayers to bail them out.”

Sen. Carl Levin, a Democrat from Michigan who heads an investigative committee that investigated the 2008 financial crisis, said Tuesday that it is “past time” for the Obama administration to nominate a new leader at the OCC.

According to reports, the White House may nominate Thomas Curry, a member of the board at the Federal Deposit Insurance Corp. to replace Walsh and head the OCC. However, it is unclear what kind of nominee the Obama administration could pick that would receive the filibuster-proof 60 votes to be confirmed for the position by the Senate.

Levin added that Walsh “tried to downplay the great damage exotic structured products did to the financial system, instead blaming poor mortgage underwriting, when in fact these exotic products multiplied risk so massively that they turned an ordinary explosion into a nuclear blast.”

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