We believe there is a distinct “state-of-the-art” approach to each of the four portfolios, including community banks. Second, supervision within the community bank portfolio has not been centralized in the way that large firm supervision has been. On the contrary, with 837 state member community banks and several thousand community bank holding companies, it would make little sense to do so.
While we strive for a well-considered overall supervisory program for our community bank portfolio, we will continue to rely on the examiners in the 12 Federal Reserve Banks to carry out that program in accordance with local conditions and based on the varying situations of community banks.