FILE PHOTO - Joseph M. Otting speaks after being sworn in as Comptroller of the Currency in Washington, U.S., November 27, 2017. REUTERS/Joshua Roberts

WASHINGTON (Reuters) - Bank examiners can continue working inside the banks they supervise, U.S. Comptroller of the Currency Joseph Otting said on Wednesday, in a policy reversal for the U.S. banking regulator.

Otting said he was stopping a project begun by his predecessor to move examiners out of large institutions like JPMorgan ChaseJPM.N and Bank of AmericaBAC.N, citing costs of independent real estate.

In a statement, Otting said the regulator would instead seek other approaches to ensure examiners did not become overly sympathetic to the banks they regulated.

The policy shift marked the latest example of the Trump administration reversing efforts by former President Barack Obama aimed at stricter oversight of large financial institutions following the global financial crisis.

“Upon review, it is not practical to continue the agency’s efforts to move resident examiners out of on-site locations,” he said. “The agency will continue to review its locations and real estate strategy to ensure they support the agency’s mission in the most operationally and cost effective manner possible.”

Otting said the OCC would focus on enhancing employee supervision, expand the ranks of its lead experts, and more frequently rotate examiners into different institutions. The policy shift was first reported by Bloomberg.

Otting, a former banker who was sworn in as head of the OCC in November, is shifting gears from a project begun by his predecessor, Thomas Curry. Beginning in 2014, the OCC looked into reducing the number of examiners it housed within large banks, in an effort to bolster their independence as supervisors. Most in-house examiners still remain.