WSJ – Fed to Relocate 250 On-Site Bank Examiners

August 15th, 2016

WSJ – Fed to Relocate 250 On-Site Bank Examiners

Recurring Theme:  Market Transparency

Summary Analysis: 

Late last week, the Wall Street Journal exclusively reported an anticipated change in the Federal Reserve Bank of New York’s regulatory structure. Apparently the regional Federal Reserve Bank plans to break from its practice of housing certain examiners on-site in the offices of the banks they regulate.  The estimated 250 on-site bank examiners will be moved into Federal Reserve Bank offices in Manhattan.  The relocation is expected to be complete by the end of next year.

Although the Federal Reserve Bank has yet to comment on the plans, the change aligns with several regulatory decisions to ensure regulators maintain an arm’s length from the bank’s they regulate to avoid potential conflicts of interest. The entire supervisory unit is also being reorganized under the President William Dudley. The Federal Reserve Bank also increased the frequency of assignment rotations among bank examiners. The decision to relocate on-site examiners marks a decided change in regulatory practices and is likely in response to criticism from Congress that regulators are too soft on bank enforcement.