Trump Picks Michelle Bowman for Fed Supervision Vice Chair

Federal Reserve Governor Michelle Bowman has reportedly been tapped to serve as the central bank’s vice-chair of supervision.

President Donald Trump plans to nominate Bowman to that regulation-focused post, according to unnamed White House officials cited in reports by the Financial Times (FT) and New York Times (NYT) Wednesday (March 12).

The news follows reports from earlier this week that Bowman was a front-runner for the Fed job. The vice-chair of supervision post had been held by Biden appointee Michael Barr, who stepped down last month to avoid a battle with Trump allies who wanted him removed.

The Federal Reserve announced Barr’s planned resignation in January. That announcement did not mention Trump by name, or speculation that the president would try to remove Barr, but said “the risk of a dispute over the position could be a distraction from our mission.”

Bowman, a former banking commissioner in Kansas named to the Fed board during Trump’s first presidency, had reportedly disagreed with Barr’s approach to regulation. Barr’s tougher stance had been criticized by major U.S. banks.

As the FT report notes, Goldman Sachs CEO David Solomon cheered the idea that Bowman could be elevated to the vice-chair position.

“I think 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,” he told Fox Business.

In a speech last month at the American Bankers Association’s Conference for Community Bankers in Phoenix, Bowman said that while the government’s regulatory framework for banks needs to promote safety and soundness, it should not hinder lender’s operations.

“Our work to maintain an effective framework is never really complete,” Bowman said. “Just as complacency can be fatal to the business of a bank, complacency can also prevent regulators from meeting their statutory obligation to promote a safe and sound banking system that enables banks to serve their customers effectively and efficiently.”

She added that the bank application process might have created roadblocks to prevent new banks from forming, and that regulations applied to banks have become too burdensome.

“The banking system can be an engine of economic growth and opportunity, particularly when it is supported by a bank regulatory framework that is rational and well-maintained,” Bowman said. “The work of rationalizing and maintaining this system is an ongoing cycle.”

In another sign of the changing regulatory landscape in Washington, the Federal Deposit Insurance Corp. announced last week that it wanted to roll back rules that had increased scrutiny into large bank mergers.