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Speaking at the Salzburg Global Workshop on Banking Regulation and Supervision, Bowman urged global regulators to pay attention to the ongoing supervision of new banking activities, in particular banking services and digital assets. According to Bowman, financial institutions have been left in a “supervisory void” in terms of new technologies.
“While some efforts have been made to provide advice, there remains significant uncertainty about the admissibility and supervisory expectations of this activity. […]. This puts banks in the precarious position of relying only on general, but non-binding statements by politicians. be criticized at some point in the future,” said Bowman, whose term at the Fed ends in 2034.
Speech by Governor Bowman on bank regulation and supervision: https://t.co/LzwsKieEcx
— Federal Reserve (@federalreserve) June 25, 2023
In addition, the Governor spoke about the risks associated with the current state of regulation, noting that without a clear regulatory framework, regulators can impose new requirements on businesses after significant investments are made. “If our role is to be effective oversight and regulation, we must be prepared to engage in both new and traditional activities,” she added.
Bowman joins dozens of other voices for a clear regulatory framework for digital assets. On June 20, ratings agency Moody’s warned that investors and companies could turn to other crypto-friendly jurisdictions without support from U.S. lawmakers for digital-focused legislation. assets.
Lawmakers from the House Financial Services Committee and the House Agriculture Committee recently released a draft discussion offering certain crypto assets a path towards being labeled digital goods. The bill would prevent the U.S. Securities and Exchange Commission (SEC) from refusing to register digital asset trading platforms as a regulated alternative trading system and would allow such firms to offer “digital goods and payment stablecoins.”
Failure to provide financial institutions with a clear approach to new technologies “could have serious implications for banks using higher interest rates,” Bowman warned.
Michelle Bowman, a member of the US Federal Reserve Board of Governors, criticized the lack of a clear regulatory framework for new technologies in the United States.