Big US banks wanted Michelle Bowman to be their new overseer at the Federal Reserve — and that’s what they got.
President Trump on Monday named the Fed governor and former Kansas banking commissioner as his choice to be the next vice chair for supervision, which would make Bowman arguably the most powerful bank regulator in Washington, D.C.
Big Wall Street financial institutions are not hiding their approval for the pick.
“I’d be excited to see Miki Bowman appointed,” Goldman Sachs (GS) CEO David Solomon said in a Fox News interview last week, after her likely appointment had been reported by several media outlets.
“I think the industry would be excited.”
The reason is that Bowman is likely to take oversight of giant US banks in a new direction as the Trump administration makes it clear it wants to lift constraints on lenders and overhaul a regulatory framework put in place following the 2008 financial crisis.
Bowman’s appointment is seen as “a major, bank-friendly shift,” Ian Katz, a managing director with Capital Alpha, said last week.
Katz, for example, expects Bowman to be instrumental in releasing giant lender Wells Fargo (WFC) from a 2018 Federal Reserve consent order that restricts it from growing any bigger.
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Bowman is also expected to revisit a new set of controversial capital rules proposed by former vice chair for supervision Michael Barr that would have required lenders to set aside greater buffers for future losses.
The requirements are based on an international set of capital requirements known as Basel III imposed in the decade following the 2008 financial crisis.
Bowman in a statement Monday night said if she wins confirmation from the Senate, she will “promote a safe and sound banking system through a pragmatic approach to supervision and regulation with a transparent and tailored bank regulatory framework that encourages innovation.”
She may still face some opposition from Sen. Elizabeth Warren, the ranking Democrat on the Senate Banking Committee.
Warren said in her own statement on Monday night that she has “deep concerns” that Bowman’s appointment “will cause yet another cycle of Wall Street deregulation, bank crashes, and bailouts that put working families at risk while letting big bank executives off the hook.”
For the moment, though, Bowman’s nomination is a clear signal from the Trump administration that the White House does want changes made to how lenders are regulated.
