Fed’s Bowman says banking system sound, touts regulatory reforms in World Economy News 05/06/2026 Federal Reserve Vice Chair for Supervision Michelle Bowman says the U.S. banking system remains sound and resilient, with banks reporting strong capital ratios and significant liquidity buffers, according to prepared testimony released today ahead of her appearance Thursday before the House Financial Services Committee. Banks continue to demonstrate strong health through sustained lending growth and robust profitability, Bowman says in the testimony. Delinquencies have increased slightly in recent quarters but remain within historical averages. The financial services competitive landscape continues to evolve as non-bank financial institutions capture a growing share of the lending market without facing comparable regulatory standards. The Federal Reserve has made substantial progress modernizing the regulatory and supervisory framework since Bowman last appeared before the committee. Federal banking regulators finalized reforms to the community bank leverage ratio framework, allowing a broader range of qualifying banks to use a simple leverage ratio to measure capital adequacy. In March, the federal banking agencies published proposals to modernize the U.S. regulatory capital framework, clarifying requirements and aligning them with actual risks. The Fed conducted a comprehensive review of all outstanding matters requiring attention, finding that many previous citations involved procedural or documentation deficiencies rather than threats to safety and soundness. Federal banking agencies also updated the capital treatment for tokenized securities and revised model risk management guidance to adopt a principles- and risk-based approach. The Fed is working to ensure thresholds throughout regulatory and supervisory frameworks are appropriately calibrated and updated to reflect economic growth and inflation. Federal banking agencies are developing regulations for stablecoin