The Federal Reserve will continue to expect much more from ever before from directors of large banks, said Federal Reserve Governor Jerome Powell, on Wednesday. In a speech at a conference sponsored by the Chicago Fed, Powell reminded the audience that, during the financial crisis, large banks incurred “massive losses” from esoteric products that were not even on the radar of bank boards. He said the Fed would work with bank directors who feel buried under paper from regulations put in place post-crisis, but said the central bank would not back away from requiring that bank boards be strong and effective. “Our reforms were designed to assure that boards of directors understand and approve the strategy of the company and the risks inherent in that strategy, and that the institution has the capital, liquidity, and risk management capabilities necessary to manage those risks,” Powell said. The Fed governor did not comment on the outlook for interest rates or the economy in his prepared remarks.
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