Federal Reserve Board ("FRB") Vice Chair for Supervision Randal K. Quarles highlighted agency efforts to make the FRB regulatory framework more transparent, simple and efficient.
In testimony before the House Committee on Financial Services, Mr. Quarles stated that the FRB has taken several steps to improve transparency by disclosing more information pertaining to supervisory activities. He cited the FRB's decision to implement a new supervisory rating system for large financial institutions as an example. Further, Mr. Quarles said the FRB expects to finalize a series of measures to improve disclosures as to the FRB's supervisory stress testing program.
Mr. Quarles underscored the FRB's recent report focusing on the agency's prudential supervisory activities. He described the report as another tool to keep Congress and the public up to speed on the FRB's work. According to Mr. Quarles, the report demonstrated that the banking sector remains "in line with strong U.S. economic performance, with lending growth, fewer nonperforming loans, and strong overall profitability."
Mr. Quarles stated that the FRB's biggest step in implementing the Economic Growth, Regulatory Relief and Consumer Protection Act thus far consists of two proposals establishing categories of prudential standards to align requirements with a firm's risk profile. The establishment of the new categories is a "step forward" with respect to regulatory efficiency, he said.
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