CHICAGO, Aug 30 (Reuters) - Federal Reserve Governor Jerome Powell on Wednesday delivered a robust defense of new regulations for bank directors that streamline the role they play in the day-to-day oversight of their institutions.
The rules, proposed last month by the U.S. central bank, have been criticized for potentially reducing the checks on bank management, whose risk-taking was seen as a key catalyst for the global financial crisis of 2007-2009.
The proposed rules shift more of the onus on handling regulatory issues to senior management, rather than the boards of directors, who have complained of being swamped by the minutiae of their oversight responsibilities.
“We do not intend that these reforms will lower the bar for boards or lighten the loads of directors,” Powell said in remarks prepared for delivery to a banking conference at the Chicago Federal Reserve Bank. “The intent is to enable directors to spend less board time on routine matters and more on core board responsibilities.”
Those responsibilities, he said, include overseeing management and holding it accountable to its strategy, and making sure that the bank keeps risk management separate from its revenue generation.
Powell’s comments come less than a week after Fed Chair Janet Yellen delivered a strong message that she would oppose a wholesale easing of post-crisis Wall Street reforms that Congress and a White House administration have suggested have slowed the economy.
Powell did not comment on monetary policy or the outlook for the U.S. economy. (Writing by Ann Saphir with reporting by Michelle Price; Editing by Chizu Nomiyama)