WASHINGTON – The Federal Reserve's top banking regulator on Tuesday released new guidelines for the agency's supervision of the financial system, earning praise from industry trade groups and criticism from her predecessor.

In a set of sweeping changes, the principles call for bank examiners to focus on material financial risks and to “not become distracted from this priority by devoting excessive attention to processes, procedures, and documentation." The guidelines are set out in a memo originally distributed to Fed employees Oct. 29 but released Tuesday .

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Michelle Bowman, the Fed's vice chair for supervision, said the principles will “sharpen” the central bank's focus and build “a more effective supervisory framework.”

“By anchoring our work in material financi

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