Small banks should be exempt from rules that are specifically aimed at stemming financial stability risks posed by large banks, a top Federal Reserve official suggested on Tuesday. "Applying a one-size-fits-all approach to regulations may produce a small benefit at a disproportionately large compliance cost to smaller institutions," Fed Board Governor Lael Brainard said in remarks prepared for delivery to community banks in Los Angeles. The comments were Brainard's first since becoming a Fed governor earlier this year, Many of the regulations passed under the 2010 Dodd-Frank Wall Street reform act are aimed at reducing risks posed by giant banks, and require plenty of time and money to implement. "It would be counterproductive to apply those same expectations to small banks," she said. "Accordingly, we think it is important to tailor rules whenever possible to clearly differentiate expectations for different portfolios of banks and reduce undue burden on community banks."