The Federal Reserve plans to reorganise its supervision and regulation division, reducing staff by approximately 30 per cent. Vice chair for supervision Michelle Bowman announced the plans during an event with staff, noting the reduction is expected to occur primarily through attrition, retirements, and voluntary separation incentives. This initiative aims to streamline operations within the agency.
A memo sent to staff indicated the division, known as S&R, is expected to have a smaller overall footprint of roughly 350 employees by the end of 2026. This is a substantial decrease from the previous authorised headcount of nearly 500 employees. A spokesperson for the central bank declined to comment on the reorganisation plans.
The reshaping of the division aligns with moves by Bowman and other US regulators to ease bank capital rules and refocus bank supervision. These changes follow larger Federal Reserve plans to reduce its system-wide workforce by about 10 per cent over the next couple of years, and mirrors efforts by the Trump administration to reduce staff at top US financial regulatory bodies.
Bowman emphasised the need for staff to concentrate on banks’ material risks, avoiding distractions from process-related items that do not impact a firm’s safety and soundness. She also mandated that the division rely on examinations conducted by a bank’s primary federal regulator, aiming to eliminate unnecessary duplication of efforts.
