The Fed and other bank supervisors, at both the state and federal levels, must clearly communicate their supervisory policies and expectations to banks, but they also must listen to and understand banks’ concerns.
For the Federal Reserve in particular, community banks not only provide insights into their industry, but they are also an unmatched source of crucial grassroots information about developments in the economy as a whole, which is necessary for effective monetary policy. At the Federal Reserve, we pursue our dialogue with community bankers through many channels.