On June 25, 2023, US Federal Reserve Board (FRB) Governor Michelle W. Bowman gave a speech that outlined her views of the best path forward for regulatory reform in the wake of the spring 2023 US bank failures (for more information, see this Latham blog post). To achieve optimal supervisory results and preserve a dynamic banking sector, while minimizing unintended consequences, Governor Bowman cautioned against implementing higher capital requirements on banks based on incomplete information or erroneous assumptions. Instead, she recommended bolstering institutional risk management and the effectiveness of the FRB’s supervisory program.
