Earlier this month, in her first public speech as the Federal Reserve's Vice Chair for Supervision, Michelle Bowman laid out her vision for how the central bank should oversee and regulate US banks. At the heart of her approach is pragmatism: identifying problems, crafting efficient solutions, analyzing both intended and unintended consequences, and considering alternative approaches that might produce better results at lower cost.

Bowman outlined how her pragmatic approach can improve the Fed's oversight of the banking system. She focused on four key areas: 

• Enhanced Supervision: Enhancing supervision to better achieve the Fed's safety and soundness goals; 

• Bank Capital: Reforming the capital framework to ensure it aligns with the structure of the US banking system; 

• Regulatory Review: Reviewing existing regulations to ensure the framework remains viable; and 

• Bank Applications: Making the application process more transparent, predictable, and fair.