FILE PHOTO: Loretta Mester, president of the Federal Reserve Bank of Cleveland, speaks during an interview in Manhattan, New York, U.S., August 15, 2017. REUTERS/Shannon Stapleton

NEW YORK (Reuters) - Cleveland Federal Reserve Bank President Loretta Mester on Friday laid out a set of guiding principles by which to approach changes to U.S. banking regulations, emphasizing the need to tailor rules to risk, to boost cooperation across borders, and to aim for simplicity but not over-simplification.

Mester’s comments come against a backdrop of intense interest at the Trump administration and in the U.S. Congress in undoing many of the banking regulations imposed after the 2007-2009 financial crisis that the banking industry views as onerous, capricious and overly complex.

Nodding to such concerns, Mester told an audience at Columbia University that banking regulators need a framework that allows them to reduce the burden on small banks while maintaining higher standards for systemically risky banks.

“For large banks, the combination of risk-based capital requirements, a leverage ratio requirement as a backstop, liquidity requirements, and annual stress testing is appropriate,” Mester said, echoing a sentiment expressed by many other U.S. central bankers, including Fed Chair Janet Yellen. International coordination, she said, is also important, leading to “more effective regulatory regimes rather than (forcing) movement to the lowest common denominator.”

And finally, simplifying regulations, Mester said, is a good goal, except when doing so makes them less effective. Breaking up large banks, she said, is an example of an apparently simple solution to the “too-big-to-fail” problem that “would cause unintended and counterproductive consequences.”

Yellen, who on Thursday met with President Donald Trump as he considers whether to retain or replace her when her term ends next February, has said that banking regulation has not hurt economic growth and has urged that only modest changes to banking rules be considered.

Mester did not address the outlook for the economy or monetary policy in her prepared remarks.