Fed’s Bowman vows ‘pragmatic’ rulemaking as prime financial institution regulator

By Pete Schroeder

WASHINGTON (Reuters) – Federal Reserve Governor Michelle Bowman instructed lawmakers on Thursday that she would overhaul how the U.S. central financial institution displays giant banks, encourage innovation, and pursue “pragmatic” guidelines for the monetary system.

Testifying earlier than the U.S. Senate Banking Committee, Bowman mentioned the present regulatory system needs to be streamlined. If confirmed to supervise financial institution regulation on the Fed, Bowman mentioned she would work to make sure regulators prioritize less complicated guidelines for smaller banks, and financial institution supervisors present clear tips for the establishments they monitor.

“The U.S. regulatory framework has grown expansively to turn into overly sophisticated and redundant, with conflicting and overlapping necessities. This development has imposed pointless and important prices on banks and their prospects,” she mentioned in her ready testimony.

Bowman was nominated by President Donald Trump to take over because the Fed’s vice chair for supervision, its prime regulatory publish. A former neighborhood banker, she has served on the Fed’s Board of Governors since 2018.

She constantly criticized efforts by the Biden administration to impose stricter guidelines on the monetary sector. As an alternative, she has known as for a lighter contact throughout a variety of regulatory instruments deployed by the Fed, which is charged with monitoring a few of the nation’s largest lenders.

She obtained fast assist from Senator Tim Scott, the Republican chairing the panel, who mentioned she would deliver “accountability and transparency” to the central financial institution. However Senator Elizabeth Warren, the panel’s prime Democrat, criticized Bowman’s name for much less onerous guidelines and oversight, significantly after a tumultuous week in monetary markets tied to Trump’s import tariffs on U.S. buying and selling companions.

“President Trump is fanning the flames of catastrophe along with his mismanagement of the nation’s economic system,” Warren mentioned. “As an alternative of exhibiting up with the fireplace division, Governor Bowman brings a can of gasoline.”

(Reporting by Pete Schroeder; Enhancing by Paul Simao)