Governor Michelle W. Bowman Emphasizes Accountability and Transparency in Federal Reserve's Regulatory Role

 February 13, 2024

In a compelling essay titled "Accountability for Banks, Accountability for Regulators," Governor Michelle W. Bowman sheds light on the crucial role of the U.S. federal banking agencies in maintaining a robust financial system. Published on February 13, 2024, the essay explores the delicate balance between the independence of bank regulators and the accountability owed to Congress and the public.

Key Points:

- The U.S. federal banking agencies are instrumental in ensuring the safety and soundness of individual financial institutions and the stability of the broader financial system.

- Independence in the Federal Reserve's bank regulatory function is designed to prioritize a safe and sound financial system, free from political influences.

- Governor Bowman highlights the necessity of accountability mechanisms, including appointments by the President and regular communication with Congress.

- Transparency is identified as a vital component of accountability, ensuring fair and predictable policies and procedures in bank regulation and supervision.

- The essay emphasizes the importance of holding both banks and regulators to high standards to maintain public trust and legitimacy.

- Governor Bowman advocates for the implementation of laws as written, avoiding the overreach of authority into areas outside the scope of banking regulation.

In a time when public confidence in institutions is declining, Governor Bowman calls for a commitment to high standards and accountability. The essay concludes by underscoring that accountability not only promotes healthy bank regulation and supervision but is also essential for maintaining a resilient and trustworthy banking system.