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Fed's Powell says parts of too-big-to-fail rules 'unnecessarily burdensome' and may not be needed at all

  • Fed Gov. Jerome Powell called parts of the Dodd-Frank Act "unnecessarily burdensome."
  • The top Fed official said some parts of the too-big-to-fail rules may not be needed at all.
  • He said parts of the rules were inappropriately applied to small and mid-sized banks.

Federal Reserve Governor Jerome Powell expressed support Thursday for removing the qualitative standard applied by regulators to regular stress testing of banks.

Powell called parts of the Dodd-Frank Act "unnecessarily burdensome" and said some parts may not be needed at all.

Jerome Powell, a member of the Fed's Board of Governors and a voting member of the Fed's policy-setting committee, said the financial regulations enacted in the wake of the financial crisis of 2008 are "excessively complex." He called for easing regulations on banks' board of directors.

Powell said parts of the too-big-to-fail regulations were "inappropriately applied to small and medium-sized" banks.

Powell said that applying a qualitative standard after the financial crisis played a key role in getting banks to understand their risks. But as banks have improved their books after the financial crisis, the need for that part of the regular stress test has lessened. "

"We've seen a great deal of progress," he said. "I do think we're getting to the point where qualitative supervision of risk management can no longer be part of the stress test but will return to being part of the normal supervision of firms."

Powell made the remarks at the Global Finance Forum in Washington, D.C.

CNBC contributed to this report.