President Donald Trump picked Federal Reserve Governor Michelle Bowman to serve as the central bank’s vice chair for supervision, a move cheered by Wall Street banks and smaller lenders who expect she’ll be friendlier to the industry.
“Miki has been serving honorably on the Fed’s Board of Governors since 2018, and has great expertise dealing with Inflation, Regulation, and Banking,” Trump said in a social media post on Monday.
“If confirmed, I will promote a safe and sound banking system through a pragmatic approach to supervision and regulation with a transparent and tailored bank regulatory framework that encourages innovation,” Bowman said in a statement.
Bowman is expected to support a lighter touch on bank regulation than her predecessor, Michael Barr. She has been a sharp critic of a landmark plan to require banks to hold more capital unveiled in 2023.
Fed Chair Jerome Powell said earlier this year he is optimistic an agreement on the long-awaited plan could be reached “fairly quickly.”
Senate Banking Committee Chair Tim Scott applauded the nomination and called Bowman an important voice in “pushing back on burdensome rules.”
In contrast, Senator Elizabeth Warren of Massachusetts said she had “deep concerns” that putting Bowman in charge of the central bank’s supervision “begs for another cycle of Wall Street deregulation, bank crashes, and bailouts.”
Bowman, a fifth-generation banker, previously served as the state bank commissioner of Kansas and was a vice president at Farmers & Drovers Bank. She became a member of the Fed’s board in 2018 and chairs the central bank’s Subcommittee on Smaller Regional and Community Banking.
In her role as the Fed’s top bank supervision official, she would have to navigate an executive order by Trump that curbs the power of independent agencies. The order, issued in February, requires the Fed to submit draft regulations related to supervision for White House review and consult with the administration on priorities and plans. It exempted the central bank’s work on monetary policy.
Some big bank executives are eager to see Bowman confirmed.
“The industry would be excited to see Miki Bowman appointed, and then that can help the banks move forward, to do what the bank should be doing, which is getting capital into the system and help supporting growth in the economy,” Goldman Sachs Group Inc. Chief Executive Officer David Solomon said in an interview with Fox Business last week.
Aaron Klein of the Brookings Institution said that Trump’s pick is an “experienced insider” who helps the Fed with continuity.
The move fills the post vacated by Barr, who resigned from that job earlier this year and avoided a potential fight with Trump over the role. He remains a member of the Fed’s Board of Governors.
“It is a major change from Barr, but I don’t think she is an outlier from traditional Republicans we have seen at the Fed,” said Ian Katz, a managing director at Capital Alpha Partners in Washington.
. Read more on World by NDTV Profit.Michelle Bowman is expected to support a lighter touch on bank regulation than her predecessor, Michael Barr. Read MoreWorld, Bloomberg
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