WASHINGTON (Reuters) - The Federal Reserve is being careful not to place too great a burden on smaller banks as it seeks to beef up regulation of the financial system, Fed Chairman Ben Bernanke said on Wednesday.
In remarks that did not touch on the outlook for the U.S. economy or monetary policy, Bernanke said community banks had some advantages, including proximity to customers, but also face “significant” challenges.
“My colleagues at the Federal Reserve and I understand these concerns, and we are committed to crafting supervisory policies and regulations that are appropriately scaled to banks’ size and complexity,” Bernanke said in prepared remarks to a banking conference at the Federal Reserve Bank of St. Louis.
The Fed last month decided to hold off on reducing the pace of its bond-buying monetary stimulus. The move appears to have been well warranted now that an indefinite government shutdown threatens to dent an already shaky growth outlook.
As it is, said Bernanke, community bankers are dealing with “a frustratingly slow recovery, stiff competition from larger banks and other financial institutions, and the responsibility of complying with new and existing regulations.”
Reporting By Pedro Nicolaci da Costa; Editing by Andrea Ricci