Federal Reserve Speeches·Jul 13, 2026, 5:25 AM ET

Bowman, Modernizing Financial Regulation

The Financial Stability Board's Standing Committee on Supervisory and Regulatory Cooperation is leading global efforts to modernize financial regulation & supervision frameworks.
Four guiding principles for modernization include prioritizing material financial risks, tailoring regulation to specific risk profiles, ensuring transparency & accountability, & maintaining a forward-looking approach for responsible innovation.
U.S. supervisors are shifting from a "more is better" approach to targeted, risk-based oversight following the Silicon Valley Bank failure.
A public consultation report outlining global modernization principles will be published in the fall for delivery to the G20.
The Federal Reserve published a March 2026 proposal to reform the U.S. capital framework by moving large banks to a single stack of risk-based requirements, recalibrating G-SIB surcharges, & indexing them to nominal economic growth.
The U.S. is enhancing supervisory transparency by publishing its first-ever Supervisory Operating Principles to clarify expectations for early risk detection.
Regulatory efforts include indexing fixed asset thresholds to economic growth & inflation to reduce burdens on banks with unchanged risk profiles.
Material financial risk assessments are being refined to focus findings on safety & soundness, with less severe issues categorized as supervisory observations.
The Federal Reserve released a consultation report on sound practices for the responsible adoption of artificial intelligence in financial institutions.
Additional U.S. modernization work involves simplifying small bank capital frameworks, enhancing supervisory guidance, & refining stress testing protocols.
The FSB aims to foster international cooperation while encouraging flexibility in approaches to accommodate the diversity of jurisdictions & institutions.