Michelle W Bowman: Considerations for revisions to the Bank Regulatory Framework

Speech by Ms Michelle W Bowman, Member of the Board of Governors of the Federal Reserve System, at the Texas Bankers Association Annual Convention, San Antonio, Texas, 19 May 2023. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

It is a pleasure to be here with you today. I am especially pleased to participate in this event focused on "Building Stronger Communities." As a former banker, former state bank commissioner, and a member of the Federal Reserve Board that theme really resonates with me. We all know that a safe, sound, and fair financial industry built upon the dual banking system is the foundation of strong and stable communities. All throughout this great nation, and the state of Texas, community and regional banks provide financial services and essential credit to assist families and businesses achieve their dreams.

Federal regulators, including the Federal Reserve, in partnership with state banking departments-like Commissioner Cooper and his team here in Texas-are responsible for ensuring that banks provide these services in accordance with consumer and safety and soundness laws. State bank regulators help to provide context and an understanding of the unique economic conditions that exist within Texas and within the different regions of the state. This context helps our supervisory teams at the Fed better understand the decisions that a bank's management might make in light of particular circumstances and market dynamics.

Today, I thought I would spend some time following up on a few topics that I have been speaking about recently that provide some insight into the roles of policymakers and regulators, but most importantly highlighting the critical role of bankers in facilitating a strong economy. I will begin with bank supervision and risk-tailored bank regulation, and how I think about tailoring in the context of the recent bank failures and ongoing discussions about regulatory reform. I will then talk about the benefits of nimble supervision and how that approach supports a U.S. financial system with banks of all sizes in every community in every diverse region of this country.