The Fed’s New Top Bank Regulator May Take Friendlier Tone | Global News Avenue

The Fed’s newly appointed head of banking oversight promised to be pragmatic, a change that has been welcomed by the industry, which sometimes left the former administration sometimes out.

President Donald Trump nominated federal governor Michelle Bowman as vice chairman of central bank supervision on Monday. Analysts said the four-year position required the Senate to confirm.

According to Capital Alpha Partners analyst Ian Katz, her choice will be a “significant, bank-friendly turn” appointed by former President Joe Biden. Bowman’s former Michael Barr remained on the Fed but left the highest regulatory position last month. In addition to voting on the Fed’s interest rate policy, its board members also voted on the Fed’s regulation of the country’s financial system.

She said Bowman would be “pragmatic”

As the top Fed’s bank official, Bowman is expected to help shape a new proposal that is more palatable to the industry, managing central banks’ stress tests on banks, overseeing their rules for consumers, and figuring out whether and how banks adopt new technologies.

In a statement, Bowman said she will use her “hands-on experience” as a banker and regulator to help develop financial policies.

“If confirmed, I will promote a safe and audio banking system through a pragmatic oversight and regulatory approach and encourage innovation through a transparent and tailored banking regulatory framework,” Bowman said.

Bowman joined the Fed in 2018 when Trump nominated her for a seven-member position in the Central Bank. Her term at the central bank will end in 2034, although her appointment as vice chairman of the supervision will last for four years.

Before joining the Fed, Bowman was a Kansas banking commissioner, working with mortgage companies and other lenders to oversee the state’s banking system. She was earlier a Kansas farmer and vice president of Devs Bank, where she joined after her early career in Washington, D.C.

Trump is Truth Society Position She will help the country “to achieve economic heights that have never been seen in our country’s history” and he said Bowman has “the knowledge” of how to accomplish it.”

Banking groups praise Bowman’s nomination

The independent community banker of the trading group representing smaller banks praised her nomination.

“Governor Bowman has advocated regulations that prioritize safety and soundness, pragmatic oversight, to ensure that the proposed reforms clearly target pressures in the financial system and to carefully follow administrative procedures to maximize transparency and avoid confusion to hinder letters of credit,” Rebeca Romero Romerero Rainey, president and CEO of ICBA, said in a statement.

Rob Nichols, president and CEO of the American Bankers Association, urged the Senate to “quickly confirm her” and called her “a thoughtful, principled voice that is wise to regulate and monetary policy.”

Analysts expect this is a “new era” of policy

Fed board members unanimously approved the vast majority of its regulatory decisions, but some of its more controversial rules sparked objections from board members.

Bowman objected to some decisions during the Biden administration. These include guidance on large banks managing climate-related risks, rules that oversee banks’ loans in low-income communities, and efforts to keep the capital mats that large banks must retain when their loans are not available to customers.

It is now possible that the opposite is true. In January, for example, two Biden-appointed Fed board members rejected a ruling that withdraws the central bank’s network and the green finance system’s supervisory network. The group is an international cooperation between global financial regulators and hopes to address climate-related risks in the financial system.

Betsy Graseck, an analyst at Morgan Stanley’s bank stock, wrote in a recent notice client that the country is now entering a “new era of banking regulation.” She noted that Treasury Secretary Scott Bessent gave a speech this month, who believed banks were “suppressed by overly heavy regulatory requirements and a broken culture of oversight.”

Gresker noted that changes in bank regulations will never happen quickly, but “the direction of travel seems to be obvious.”

“The Trump administration is looking for a less-thick, tailored regulatory approach that supports growth in lending, corporate activity and bank earnings,” she wrote.