The Federal Reserve announced Friday that it is instituting new policies meant to slow the “revolving door” between the banking industry and regulatory positions.
The agency’s Board of Governors said it would be expanding a one-year ban on bank examiners working at the banks that they oversaw.
That restriction previously applied to about 100 Fed examiners, many of who are physically located within the banks they oversee. It will now apply to 250 employees, according to the central bank.
Additionally, the Fed will impose a new one-year ban on former Fed officials lobbying the bank if they represent financial institutions, and also a ban on employees from talking business with them.
In recent years, the Fed has faced scrutiny from Congress about its ties with banks, and top lawmakers are worried that regulators might be too cozy with the bankers they supervise.
Post-financial crisis, the Fed has already taken steps to try to avoid regulatory “capture” by banks and ensure that its regulators scrutinize bankers’ decisions, including by shifting responsibility from the New York regional Fed bank, long seen by critics as too closely aligned with big banks.
