Before sharing my views on the underlying principles that need to guide our thinking on our future supervisory approaches, I’ll first offer some thoughts on a few aspects of Federal Reserve supervision that I believe must be preserved even as we think expansively about the future: 1. The first being the Federal Reserve’s Supervisory structure.
Although the Fed’s supervision and regulation of banks is the responsibility of the Board of Governors, the dayto-day supervision of banks is delegated to the Reserve Banks. This distributed system ensures we have most of our examination workforce living and working in the same communities served by our community banks.