Fed Says Bank Supervisors Should Focus on Material Risk in Exams

The Federal Reserve released information about “enhancements” to supervision, saying that staff should should align bank exams and ratings to material financial risks and reduce duplication between exams.

“Our supervisory approach is not about narrowing our focus — it is about sharpening it,” Fed Vice Chair for Supervision Michelle Bowman said in a statement on Tuesday.

Bloomberg News previously reported that Bowman planned to reorganize the agency’s supervision and regulation division and shrink the unit’s staff by roughly 30%. She also has outlined other expectations, including a mandate to rely on the exams of a bank’s primary federal regulator rather ...