Senate confirms Bowman as Fed's bank watchdog
New Federal Reserve vice-chair for supervision Michelle Bowman. — Bloomberg
WASHINGTON: US Federal Reserve (Fed) governor Michelle Bowman has been confirmed by the US Senate to serve as the central bank's vice-chair for supervision, further signalling a shift to lighter regulation under President Donald Trump.
Bowman, a fifth-generation banker and Republican, has long touted the need for more 'tailored' oversight in her speeches.
She has signalled significant changes in regulatory priorities and has a friendlier relationship with the bank industry than her predecessor, Michael Barr.
Barr resigned from the role earlier this year.
She frequently countered him on issues including bank oversight, stress-test reforms and capital rules.
Bowman has said that watchdogs should be better aligned in their goals for the financial system.
That effort has already started to take shape, with Treasury secretary Scott Bessent hosting Bowman and other regulators for private meetings in a bid to streamline oversight, according to sources.
Bowman has also hired advisers from lending giant Goldman Sachs Group Inc, Wall Street legal heavyweight Davis Polk & Wardwell and big-bank lobbying powerhouse the Bank Policy Institute.
Bowman has said that she will work with officials at the Federal Deposit Insurance Corp and the Office of the Comptroller of the Currency to re-propose a landmark US bank-capital proposal known as Basel III endgame.
She was a sharp critic of the plan as originally drafted, which would have hiked the biggest banks' capital requirements by 19% to buffer against losses and a financial crisis.
She is also working with other regulators on potential changes to the supplementary leverage ratio (SLR).
Critics have argued the SLR ratio has limited banks' purchases of traditionally safer instruments like US Treasuries.
Bessent said in May that officials may move this summer on easing that capital rule.
Dennis Kelleher, president of Washington-based consumer advocacy group Better Markets, said Bowman's role is to protect the jobs and savings of everyday Americans from the risks of Wall Street.
'Unfortunately, Bowman has the opposite views: while claiming to care about Main Street, she enthusiastically and unequivocally supports those banks' priority of deep, broad and mindless deregulation,' Kelleher said.
But industry groups like the Independent Community Bankers of America said in a statement that Bowman's real-world experience gives her a keen understanding of how certain regulations applied universally – regardless of a bank's complexity or risk profile – impedes access to credit for those who need it most.
Bowman told lawmakers in April that regulation has become overly complicated and redundant. — Bloomberg
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