The Fed has basically infiltrated Wall Street board meetings
The Fed and the OCC have started holding regular meetings with bank boards, reviewing minutes, and asking more and more questions of directors, The Wall Street Journal's Victoria McGrane and Jon Hilsenrath reported.
The idea is to monitor the boards' own oversight of management.
At Morgan Stanley, for example, Fed representatives are allowed to participate in every board meeting - at least for a portion of the meetings. JPMorgan Chase invites Fed supervisors to some meetings, while directors hold outside meetings with regulators as well.
A Goldman Sachs director meets with Fed supervisors each month. And at Bank of America, one lead director makes monthly phone calls to regulators in addition to regular meetings in person.
And those are just the regular meetings. Then there are the special circumstances. After this month's bank stress tests, for example, Fed representatives held multiple conversations to discuss the results with directors, the Journal reported.
Regulators say it's important for boards to understand the risks their companies take - something that was missing in the years running up to the financial crisis.
But, not surprisingly, some board members are not responding well. The American Association of Bank Directors said directors are afraid to stay on boards because of the increased responsibility and risk of personal liability. Other would-be directors aren't even joining in the first place.
Those Fed officials can be pretty scary.
Read the full story in The Wall Street Journal »
- I got a $40K raise using this 30-second strategy. It made me realize loud work, not hard work, always wins.
- A millennial manager went viral after her Gen Z assistant picked up a work call while at the hair salon: 'Go off queen'
- Qatar Airways' new CEO explains why it's sticking with the Airbus A380 as other airlines retire the costly superjumbo
- Kia India looks to expand sales, service network to 700 touchpoints by year-end
- Shapoorji Pallonji’s Afcons Infra files DRHP for ₹7,000 crore IPO
- Water crisis affects businesses across Bengaluru; Is there room for cautious optimism?
- BenQ Zowie EC2-CW review – Premium wireless mouse for gamers
- Banks' GNPAs set to improve further to 2.1 pc by FY25: Care Ratings