Quarles Outlines Plans to Improve Supervision Transparency, Due Process

Federal Reserve Vice Chairman for Supervision Randal Quarles today outlined several actions the agency is considering to increase the transparency of its supervisory activities and ensure due process for supervised institutions, acknowledging that the Fed has not “communicated as clearly as it should” with banks under its supervision.

With respect to transparency, Quarles said the Fed is considering creating a database of all significant agency rules and interpretations, putting supervisory guidance out for public comment and submitting significant guidance to Congress for purposes of the Congressional Review Act. He also noted that the agency will continue making public information about the Comprehensive Capital Analysis and Review process “until we have released substantial details on all of our key models.”

Quarles also signaled that the Fed’s long-awaited stress capital buffer proposal “will give banks significantly more time to review their stress test results and understand their capital requirements before we demand their final capital plan.”

In addition, Quarles said the agency would seek to ensure “firm and fair supervision” by increasing the ability of supervised firms to share confidential supervisory information, adopting a formal rule on the use of guidance in the supervisory process and limiting the use of future Matters Requiring Attention to violations of law, violations of regulation and material safety and soundness issues.