Bowman reorganizes bank supervision into five regions
Federal Reserve Vice Chair for Supervision Michelle W Bowman announced a five-region supervisory structure in St. Louis on October 6, 2026. She also set out changes to community bank thresholds, ratings and capital requirements.
Five regions replace fragmented accountability
The Federal Reserve (Fed) is beginning to reorganize supervision into five regions following state boundaries rather than Reserve Bank District lines.
Each regional leader will be accountable for all supervisory activity, while examiners retain their existing locations and bank assignments.
Bowman said committees had delayed action and obscured responsibility.
Starling Advisory Group's September review of Silicon Valley Bank identified a mismatch between decision-making authority and accountability: the Vice Chair oversees supervision, but Reserve Banks conduct it.
The structure draws on the Conference of State Bank Supervisors' regional model.
Supervision will prioritize material financial harm, supported by examiner training and clearer expectations.
Fixed thresholds lose their fit
The Fed, Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation lowered the community bank leverage ratio to 8 percent.
Later in 2026, the Board will consider inflation- and growth-adjusted thresholds, updated every five years, and broader tailoring changes.
The community bank cutoff has remained $10 billion for 15 years.
July 31 proposals revised Regulation O's insider-lending limits, not comprehensively updated since 1979.
The Fed ended its Novel Activities Supervision Program and is pursuing merger, new-bank approval and call-report reforms.
Financial risk sets the test
Bowman links clearer accountability to timely action against financial vulnerabilities.
Federal Financial Institutions Examination Council revisions to CAMELS would clarify component weights and stop the Management rating from alone driving composite ratings.
She retains capital and liquidity as the foundation of safety and soundness.