Bowman says Fed plans bank supervision overhaul and review of stricter asset thresholds

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.