Fed plans to overhaul bank supervision responsibilities, Bowman says
XLF•The Federal Reserve plans to create five regional bank-supervision regions led by new regional leaders, shifting oversight away from regional Fed presidents. The Fed will also consider updating bank asset thresholds later this year, including a mechanism to adjust them every five years.
1. New supervisory structure
The Fed plans to create five geographic regions for bank supervision, each led by a regional leader. Regional Reserve Bank staff will continue conducting supervision, while the new leaders will be responsible for supervisory activity; regional Fed presidents currently oversee supervision in their districts. Vice Chair for Supervision Michelle Bowman said the changes aim to establish clearer decision-making authority and accountability.
2. Thresholds under review
Bowman said the Fed would consider updating the asset thresholds that determine when banks face stricter rules, including fixed-dollar thresholds and a mechanism to adjust them every five years for inflation and economic growth. The thresholds affect requirements for capital, liquidity and stress testing. Bowman also criticized the use of supervisory committees, arguing they could delay action and blur responsibility.
