On June 6, 2025, Michelle W. Bowman spoke at the Georgetown University McDonough School of Business Psaros Center for Financial Markets and Policy where she described her approach to leading the Fed's Division of Supervision and Regulation as the Vice Chair for Supervision. In her speech, the new Vice Chair of Supervision outlined the principles she said are designed to enhance the Fed’s supervision and regulatory efforts and how they will be incorporated into the agency’s work.
Bowman shared how these principles should be incorporated into the agency’s goals by addressing the following:
Enhancing Supervision. According to Bowman, supervision should be focused on material financial risks by tailoring the supervisory approach to financial institutions, ensuring that rating frameworks are appropriately designed to capture material financial risks, and improving prioritization during examinations. Bowman also emphasized the important role of guidance in the supervisory as an effective tool to promote transparency in supervisory expectations, as well as as the importance of examiner training and credentials.
Capital. Bowman talked about addressing capital requirements to improve financial stability. She emphasized the need to reconsider the calibration of capital frameworks and invited broader discussions on potential reforms, including adjustments to leverage ratios and stress testing processes, to ensure they effectively capture risks without creating market distortions.
Review of Regulations and Information Collections. The Dodd-Frank Act has led to a significant increase in banking regulations since the 2008 financial crisis, prompting a need to evaluate their ongoing relevance and effectiveness, particularly concerning their impact on foundational banking activities. The Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) review process aims to identify and eliminate outdated or burdensome regulations, ensuring a balanced approach between safety and the ability of banks to serve their customers effectively.
Banking Applications. According to Bowman, the regulatory approval process for banking applications needs to be more transparent and streamlined, with clearer standards and timelines to encourage activity. Addressing issues such as lengthy processing delays and unnecessary requests for information could improve efficiency, particularly in underserved banking markets.
Read Bowman’s full speech here.