May 14 (Bloomberg) -- JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon's position as a director on the Federal Reserve Bank of New York's board renewed concern that the central bank is too close to the institutions it oversees.

Dimon, who disclosed a $2 billion trading loss by his firm last week, is one of three bankers sitting on the New York Fed's board, as mandated by Congress under the Federal Reserve Act. While directors have no role in bank supervision, Elizabeth Warren, a Massachusetts Democrat running for U.S. Senate, called for Dimon's removal from the district bank board because the New York Fed regulates JPMorgan. Senator Bernard Sanders, a Vermont Independent, said he sees a conflict in Dimon's two roles.

Fed governance came under scrutiny after taxpayer-funded bailouts during the 2008 financial crisis sparked a political backlash. The Dodd-Frank Act overhauling bank supervision required a Government Accountability Office audit of the central bank, which was completed last year and found the Fed needs to strengthen policies governing conflicts of interest and improve transparency.

Having bankers on the boards of regional Fed banks "is a problem, period," said Sheila Bair, senior adviser at Pew Charitable Trusts and a former chairman of the Federal Deposit Insurance Corp. "Why the regional banks have members of the industry that they regulate on their boards is beyond me."