The Federal Reserve released a set of supervisory operating principles on 18 November 2025, directing its examination staff to focus their work on material financial risks that affect the safety and soundness of the institutions they oversee. The principles, which were distributed to all Federal Reserve supervisory leadership and staff across the system, set out priorities for the central bank's examination programme.
The principles direct supervisors to anchor their work to whether an identified issue poses a material risk to an institution's financial condition.
REDUCING DUPLICATION AND STREAMLINING ISSUE REMEDIATION
Among the specific operational commitments set out in the principles, the Federal Reserve highlighted a goal of reducing duplication between examinations by different supervisors, with Fed staff expected to rely as far as possible on the work of a bank subsidiary's primary state or federal supervisor. The principles also direct examiners to work jointly with state banking agencies on state member banks and to rely on state examination work in alternate years where possible.
The principles also committed the Fed to streamlining the process by which banks are expected to remediate examination findings, including relying on a bank's internal audit to validate remediation where that function is rated satisfactory.
DISTRIBUTION AND NEXT STEPS
The principles were distributed to all Federal Reserve supervisory leadership and staff.
The Federal Reserve did not announce changes to examination staffing levels or schedules in conjunction with the principles, saying it was training examiners to implement the principles promptly and expected to formalise them in public supervisory guidance or regulatory changes where appropriate.