Federal Reserve to consolidate bank supervision into five regions

The Federal Reserve is planning a major restructuring of its bank supervision system, consolidating authority from 12 regional districts into five new geographic regions. Fed Vice Chair for Supervision Michelle Bowman announced the plan, noting that the new regions will follow state borders to better coordinate with state and federal regulatory partners.

Under the proposed model, each of the five regions will be led by a regional head responsible for all supervisory activities. While staff at existing regional Fed banks will continue to perform specific examination tasks, the supervisory authority previously held by regional bank presidents will transfer to these new regional leaders. The plan also includes a mechanism to review asset thresholds every five years.

Bowman cited an independent review of the Silicon Valley Bank collapse as a primary driver for the reform, stating that the current structure has “fundamental flaws in responsibility and accountability.” She argued that the existing model, which separates policy-setting in Washington from execution in the 12 districts, has created a “complex web of dozens of committees” that can lead to dysfunction and a lack of clear decision-making during critical periods.