Federal Reserve Governor Bowman: The Federal Reserve plans to reshape the bank regulatory system and reassess the asset thresholds for stricter supervision.

October 6 — The Federal Reserve plans to comprehensively overhaul the U.S. bank regulatory system, changing the current model in which regional Federal Reserve Bank presidents are responsible for supervising bank examinations to a new structure with clearer accountability to the Washington headquarters.

The Fed's top bank regulatory official unveiled the reform plan on Tuesday. Michelle Bowman, the Fed's vice chair for supervision, said the reform will create five new geographic bank supervision regions, each led by a "regional lead." In remarks prepared for a meeting at the St. Louis Fed, Bowman said the existing structure "weakens the vital link between responsibility and accountability."

Bowman said: "The Fed's supervisory function will be realigned to establish a culture that emphasizes accountability and clear decision-making authority." Under the new supervisory arrangement, five regional leads will be responsible for all supervisory activities within their respective regions. However, specific examination work will still be carried out by staff at the regional Federal Reserve Banks. Bowman also announced that the Fed will consider adjusting asset-size thresholds later this year, which determine the size at which banks become subject to stricter regulatory rules.