WASHINGTON (Reuters) - The regulatory power of the Federal Reserve Bank of New York has shifted to a committee in Washington established in a previously undisclosed paper written in 2010, the Wall Street Journal reported on Thursday.
The change, which the newspaper said had been enacted slowly during the past five years, moves the center of banking oversight to Washington and the Large Institution Supervision Coordinating Committee, headed by Fed Governor Daniel Tarullo.
The committee was set up in a six-page paper known as the Triangle Document, the Journal said, after the 2008 financial crisis, which brought the New York Fed under scrutiny.
“It was obvious that a lot in the U.S. regulatory system had not worked particularly well before the crisis,” Tarullo told the Journal. “It was equally obvious that there was going to need to be a rethink and reorganization.”
On Thursday, the Fed will release the results of annual stress tests of big banks, a program by Tarullo’s committee.
The Journal cited Washington officials as saying that centralized regulatory authority in Washington will give a broader, more even-handed approach to oversight.
The New York Fed had dominated bank regulation but was denied requests for more representatives on the new committee.
“This reserve bank doesn’t breathe any more without asking Washington if it can inhale or exhale,” said one person prominent in the banking community told the newspaper.
Writing by Bill Trott; Editing by Chizu Nomiyama