The Federal Reserve Board on Tuesday released information regarding enhancements to bank supervision. The new supervisory operating principles were provided to all Federal Reserve supervisory leadership and staff and are intended to focus Federal Reserve examiners on material financial risks threatening the safety and soundness of banks and on taking timely, proportionate action to ensure that those risks are properly addressed.
"Our supervisory approach is not about narrowing our focus-it is about sharpening it," said Vice Chair for Supervision Michelle W. Bowman. "By anchoring our work in material financial risks, we strengthen the banking system's foundation while upholding transparency, accountability, and fairness. This is not about what we are leaving behind-it is about building a more effective supervisory framework that truly promotes safety and soundness across our financial system, which is the Federal Reserve's core supervisory responsibility."
The principles align bank examination and ratings to material financial risks, reduce duplication between exams from different supervisors, and streamline the remediation of issues cited by supervisors, among other things. The Federal Reserve is training examiners to help ensure prompt implementation of the principles. Supervision leadership will continue to refine these principles and expects to formalize them in public supervisory guidance or regulatory changes, where appropriate.
