The Federal Reserve is preparing a broad overhaul of the U.S. bank supervision framework, replacing the current model in which regional Federal Reserve Bank presidents oversee bank examination supervision with a structure that carries clearer accountability to the Board in Washington. The plan was outlined Tuesday by the Fed’s top banking supervision official, Vice Chair for Supervision Michelle Bowman. Under the proposal, the central bank would create five geographic bank supervision regions, each led by a regional director responsible for all supervisory activity in that area, while on-the-ground examinations would still be carried out by staff at the regional Reserve Banks. In prepared remarks for an event hosted by the St. Louis Fed, Bowman said the current setup has weakened the link between responsibility and accountability. She also said the Fed will later this year consider changes to the asset-size thresholds that determine when banks become subject to tougher regulatory requirements.
On Oct. 6, BlockBeats reported that the Federal Reserve is planning a broad restructuring of the U.S. bank supervision system, replacing the current setup in which regional Federal Reserve Bank presidents oversee bank examination supervision with a new framework that would carry clearer responsibility to the Board in Washington.
The reform plan was released Tuesday by the Fed’s top banking supervision official. Michelle Bowman, the Federal Reserve’s Vice Chair for Supervision, said the new structure would divide bank supervision into five geographic regions, with each region led by a regional director.
In prepared remarks for a conference hosted by the St. Louis Fed, Bowman said the existing structure has "weakened the critical link between responsibility and accountability." She added: "The Federal Reserve’s supervisory function will be realigned to build a culture that emphasizes accountability and clear decision-making authority."
Under the new arrangement, the five regional directors would oversee all supervisory activity within their respective regions. Actual examination work, however, would still be carried out by staff at the regional Federal Reserve Banks.
Bowman also said the Fed will consider changes later this year to the asset-size thresholds that determine when banks become subject to stricter regulatory requirements.
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