Fed to Revamp Bank Supervision Framework, Bowman Says
MT newswire2026/10/06 19:2003:20 PM EDT, 10/06/2026 (MT Newswires) -- The Federal Reserve will restructure its supervision framework for banks as it seeks to address a mismatch between decision-making power and regulatory accountability, Fed Vice Chair for Supervision Michelle Bowman said Tuesday. The US central bank plans to establish five regions, each to be led by a regional leader who will be accountable for all supervisory activity in the region, Bowman said in prepared remarks for a conference in Missouri. Currently, bank supervision is handled by the 12 regional Fed branches. "That structure has disincentivized a critical link between responsibility and accountability and has been further complicated by a complex web of dozens of committees, resulting in dysfunction when critical decisions are most needed," she said. The Starling Advisory Group released its initial report last month on Silicon Valley Bank's failure, showing that supervisory staff didn't take prompt action to help avert its potential collapse. SVB eventually failed in 2023. "The independent review highlighted a long-standing structural issue in the supervisory function -- a mismatch between authority for decision-making and accountability for supervisory decisions," Bowman said. Bowman expects the simplified structure to help the Fed coordinate better with state and federal regulatory partners. "It simplifies our leadership structure while preserving local supervision by examiners," Bowman said. "They will remain in the existing Reserve Bank locations across each region, continuing to oversee the banks they currently supervise."
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