Fed unveils'big overhaul 'of how banks are supervised

The Federal Reserve has detailed a "major overhaul" of the way it expects its supervisors to supervise banks, the latest step in an important move by Governor Bowman to loosen and improve bank supervision. The central bank on Tuesday released a three-page memo detailing new expectations for its bank examiners, which broadly instructed staff to focus on significant financial risks at banks and imposed limits on oversight of other matters. The memo detailed changes that could sharply reduce the scope of work of the Fed's inspectors, who are charged with ensuring the safety and soundness of banks. At the same time, Bowman has launched plans to cut the number of Fed supervisors by 30% over the next year. The changes are expected to affect the Federal Reserve's approach to bank supervision in terms of overall stability, but will not change its limited oversight of consumer protections and fair lending laws for small banks.