“The Federal Reserve Board on Tuesday announced that it is implementing several recommendations to enhance the supervision of large and complex banking organizations. The recommendations were developed after an extensive review of Reserve Bank procedures for supporting consistent and sound supervisory decisions as well as methods used by Reserve Banks to resolve differing staff opinions related to the supervision of large and complex firms. While the review found that 95 percent of staff interviewed felt empowered to raise differing opinions, it noted that a formal process for raising divergent views had not been established. To address this, the Federal Reserve System in 2016 will develop policies and practices to encourage the exchange of, and response to, divergent staff views on all supervisory matters. Additionally, the review found that some supervisory teams employed sound practices and produced detailed and thorough analysis. However, the review also identified inconsistencies in documentation produced by supervisory teams and noted instances of inconsistent practices by Reserve Banks. To remedy these inconsistencies, the Operating Committee of the Large Institution Supervision Coordinating Committee (LISCC) will oversee the establishment of minimum operating and documentation standards for all supervisory activities. The Federal Reserve Banks of New York and Richmond have also added new resources to their dedicated supervisory teams to ensure consistency in their supervisory approaches. The LISCC was formed following the financial crisis and is comprised of Federal Reserve Board and Federal Reserve Bank senior staff. It coordinates the supervision of the largest, most systemically important financial institutions in the United States…”
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