Fed to launch new bank exam teams

The Federal Reserve plans to intensify its scrutiny of bank lending and financial health with teams made up of experts in a variety of new areas. Fed Governor Daniel Tarullo outlined the plan during a Senate Banking Committee hearing in Washington today. The overhaul, which would make reviews more uniform across the banking system, builds on the stress tests the central bank completed on the biggest 19 banks in May, he said. “We are prioritizing and expanding” the examination process to “assess key operations, risks and risk management activities of large institutions,” Tarullo said in his testimony today. “This program will be distinct from the activities of on-site examination teams so as to provide an independent supervisory perspective. This work will be performed by a multidisciplinary group composed of our economic and market researchers, supervisors, market operations specialists and accounting and legal experts,” Tarullo said.

A regulatory tussle has been unfolding since the Obama administration proposed strengthening the Fed's regulatory profile. The major regulators have each opposed some aspect of the plan in hopes of maintaining their own powers as the winds of change blow in.