Of course, many of our regular interactions with community banks arise from our oversight of bank holding companies and state-chartered banks that choose to join the Federal Reserve System. This supervision is guided by the Board, but conducted day-to-day by the Reserve Banks and their examiners, many of whom have lived and worked within the Districts they serve for many years.
We believe this approach ensures that Federal Reserve supervision of community banks is consistent and disciplined but also reflects a local perspective that can take account of differences in regional economic conditions. For example, in the Midwest, where many community banks specialize in agricultural lending, Federal Reserve examiners maintain a special expertise in the agricultural economy and the associated lending practices.