* Randal Quarles warns revising rule will be substantial effort
* Fed also looking to recalibrate leverage ratio, liquidity rules
* Says he aims to "improve" upon, not gut, post-crisis rules (Adds context, comments)
WASHINGTON, Jan 19 (Reuters) - U.S. financial regulators have begun work on a proposal to "streamline" the Volcker Rule banning banks from making risky bets with their own money, the country's top banking regulator said on Friday, in a development that will be cheered by banks that have long complained the rule is too onerous.
Randal Quarles, vice chairman for supervision at the Federal Reserve, told a conference in Washington that the five agencies which oversee the rule were working on a proposal but warned it would "take a bit of work for the agencies to congeal around a thoughtful Volcker Rule 2.0."
Quarles, who was appointed to his role in October, used the speech to outline for the first time a comprehensive vision for how the Fed - the country's top banking regulator - can go about easing rules introduced following the 2008 global financial crisis.
In addition to simplifying the Volcker Rule, Quarles said a proposal to recalibrate the leverage ratio that imposes an extra capital burden on banks should be published "relatively soon" and that he was working with the Fed board to simplify other loss-aborbency bank capital requirements.
He added that the Fed should take "concrete steps" to tailor liquidity requirements for non-global large banks and to increase further the transparency of bank stress tests designed to gauge how a bank would cope with a sudden market shock.
The Fed has also recently told on-the-ground bank examiners not to treat 2013 guidelines outlining restrictions on leveraged lending as a hard and fast rule - a subject of contention between the regulators and bankers, who say examiners have imposed the guidelines as though they were written into law.
Quarles cautioned that none of the envisaged proposals represented a gutting of core post-crisis reforms that have improved the resilience of the financial system and that his intention was to improve upon the efforts of his predecessors.
"Now is an eminently natural and expected time to step back and assess those efforts. It is our responsibility to ensure that they are working as intended and - given the breadth and complexity of this new body of regulation - it is inevitable that we will be able to improve them, especially with the benefit of experience and hindsight."
(Reporting by Michelle Price; Editing by Lisa Von Ahn and Cynthia Osterman)