Federal Reserve Inspector General Calls for Reforms in Regional Fed Leadership Selection and Oversight
The Federal Reserve's internal watchdog, the Inspector General (IG), has recommended significant changes to the process governing the selection of leaders for the 12 regional Federal Reserve banks and other senior staff. The IG's report specifically highlighted concerns regarding the oversight of Class C directors on regional Fed boards. These directors, appointed by the Federal Reserve Board of Governors in Washington, currently lack sufficient pre-screening for potential conflicts of interest and are not adequately informed about prohibited stockholdings before their appointment. The report also noted that Class C directors are not required to personally review and account for their financial interests to ensure compliance with conflict policies or eligibility requirements. Furthermore, the IG found that the Federal Reserve in Washington has not clearly documented its candidate selection process for Reserve Banks, leading to inconsistencies in practices across different regional banks. 
