In a speech delivered Friday (June 6) at Georgetown University in Washington, D.C., Bowman, who has been a member of the board of governors at the Fed since November 2018, said supervisors should not be distracted by banks’ shortcomings that are relatively less important, according to a transcript posted by the Fed.
To enhance supervision, Bowman said that going forward, the Fed will work to create a regulatory framework for independent community banks that will be tailored to them, rather than larger and more complex banks; review the supervisory ratings of large banks to make them more closely align with the banks’ financial condition; refocus the supervisory process on core financial risks; and review existing guidance to ensure it encourages innovation.
In terms of capital framework, Bowman said the Fed will review these requirements to promote “transparency, fairness and predictability in the stress testing program.”
The Fed will also review regulations and information collections, Bowman said, to ensure they are relevant, not overly burdensome, and “strike the right balance between encouraging growth and innovation, and safety and soundness.”
Banking applications will also be reviewed, Bowman said, and the Fed will look to streamline applications for de novo formation, for mergers and acquisitions, and for any other regulatory approval.
“Conditions constantly evolve in the banking system, and so too must the regulatory and supervisory framework,” Bowman said in the speech. “We must be proactive and responsive in the face of emerging risks and ensure that the framework operates in an efficient and effective manner.”
Bowman was confirmed to the vice chair for supervision post Wednesday (June 4) by a Senate vote of 48 to 46, Reuters reported Wednesday.
In past speeches, Bowman has advocated for “regulatory tailoring,” streamlining the banking application process, and prioritizing “how we integrate innovation as we revise or enhance regulatory frameworks,” PYMNTS reported in March.
