President Donald Trump has chosen Federal Reserve Governor Michelle Bowman as the central bank's vice chair for supervision, a decision that has pleased both Wall Street banks and smaller lenders who anticipate a more supportive stance towards the industry.
Trump mentioned in a social media post that Bowman has been a valuable member of the Fed's Board of Governors since 2018 and holds expertise in addressing issues like inflation, regulation, and banking. It was previously reported by Bloomberg that Bowman would likely be nominated for the position.
If confirmed, Bowman aims to enhance a secure banking system by implementing a balanced approach to supervision and regulation with clear and customized bank regulatory guidelines that foster innovation. She is expected to take a more lenient approach to bank regulation compared to her predecessor, Michael Barr, and has criticized a significant initiative requiring banks to increase their capital reserves projected for 2023.
Chair of the Senate Banking Committee, Tim Scott, welcomed Bowman's nomination, recognizing her as a crucial advocate for easing burdensome regulations. However, Senator Elizabeth Warren expressed reservations about Bowman's appointment, fearing a repeat of financial deregulation leading to bank failures and government bailouts.
Bowman, with a background as a fifth-generation banker and prior experience as the state bank commissioner of Kansas and a vice president at Farmers & Drovers Bank, has been a member of the Fed's board since 2018 and leads the central bank's Subcommittee on Smaller Regional and Community Banking.
As the Fed's chief banking supervisor, she will need to navigate an executive order by Trump that limits the autonomy of independent agencies, requiring the Fed to consult with the White House on regulatory matters related to supervision. This order excludes the central bank's functions concerning monetary policy.
Despite some concerns, Bowman’s nomination is eagerly anticipated by executives in the banking industry, such as Goldman Sachs Group Inc. CEO David Solomon, who believes her confirmation would facilitate capital flow into the economy and support its growth.