Federal Reserve Vice Chair for Supervision Michelle Bowman said community banks engaged in conventional lending and deposit-taking do not require the same supervisory approach as globally active institutions engaged in complex activities.
Details: Speaking in Bangkok on supervisory modernization after the failure of Silicon Valley Bank, Bowman said the Fed is considering ways to enhance its supervisory decision-making framework to ensure:
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More direct allocation of responsibility, authority, and accountability between the Federal Reserve Board and Reserve Bank staff.
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Clear decision rights for examiners and supervisory leadership.
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Direct escalation channels from examination teams to senior supervision leadership.
More on SVB: Bowman last month said an independent review of the failure of Silicon Valley Bank found the Fed’s supervisory staff knew, or should have known, about the bank’s vulnerabilities a year before its collapse. The FDIC in May published a staff study of deposit flows at the three banks, including SVB, that failed in the spring of 2023.