The Federal Reserve has completed a major restructuring of its bank-supervision division under Vice Chair for Supervision Michelle Bowman, a move that reflects her strategy of concentrating oversight on core financial risks.
According to a staff memo reported by Bloomberg, Bowman described the reorganization as a milestone in making supervision more effective, efficient, transparent, fair, and accountable.
Effective July 12, the division will be reorganized into four core areas, including Supervision; Financial Research, Risk & Applications; Regulation & Policy; and Business Enablement. Additional leadership positions will also be filled.
The reorganization follows plans announced last October to reduce staffing by roughly 30% and eliminate duplicative oversight. Supervisors were directed to rely more on examinations conducted by banks’ primary federal regulators while placing a greater emphasis on risks that directly affect financial health instead of compliance procedures.
Organizational changes also merge policy research with stress-testing functions, strengthen analysis supporting merger and acquisition applications, and give the head of supervision direct oversight of reserve bank supervision and banking industry engagement.
