The Federal Reserve's regulatory czar laid out his plans Friday to relax regulations on Wall Street banks.
Regulators have imposed stricter rules on banks for a decade since the 2008 financial crisis. But Randal Quarles, appointed last year by President Trump, said it was time to "step back" and evaluate whether the rules governing the largest banks are working as they should.
"Given the breadth and complexity of this new body of regulation -- it is inevitable that we will be able to improve them, especially with the benefit of experience and hindsight," Quarles said in prepared remarks to the American Bar Association conference.
He said those fixes will include improving the transparency of a yearly exercise the Fed conducts to determine whether a bank can withstand a severe recession and how they prepare for losses in any future financial crisis.
Last year, the Fed asked banks for suggestions on making the exercise more transparent. That feedback is due on Monday.
Wall Street banks have long complained the models the Fed uses in its "stress test" are too opaque. Each year, regulators tweak the exam to keep banks on their toes.
Quarles stopped short of saying the Fed should fully disclose the models that regulators use to test the strength of big banks.
Changes to banks' yearly checkup are among several areas that Jerome Powell, the Fed governor nominated to replace Janet Yellen as Fed chair next month, outlined last summer as ripe for improvement.
Powell also said regulators should simplify rules on community banks, ease the burden on banks in drafting plans for possible bankruptcy, and the so-called Volcker Rule, which bars banks from making risky wagers with their own money.
Quarles said he "wholeheartedly" supported all these initiatives and added a few more to his regulatory agenda.
He also said paring back regulations shouldn't only be for the smallest banks in the country, but also for much larger banks that don't pose a systemic risk to the financial system.
And while a package of changes to the 2010 Dodd-Frank regulatory reform law is making its way through Capitol Hill, Quarles said regulators should do their part to adjust rules based on the riskiness of a financial institution.
"Irrespective of where the legislative efforts land, I believe we at the Federal Reserve have the responsibility to ensure that we do further tailoring for the institutions," Quarles said.
Quarles, a former Carlyle Group managing director who started at the Fed in October, also said regulators should do a better job of evaluating whether the benefits of regulations outweigh the costs before issuing a rule.
On Friday, a Fed spokesman confirmed to CNNMoney that the central bank hired four people to help determine the costs of regulations when drafting their plans. The Fed plans to double the size of that team.
When the Fed crafted regulations in the past, rule writers tried to assess whether the benefit outweighed any economic cost. But the Fed decided more than a year ago to improve that process by hiring more economists.