MNI: Fed's Bowman Says Banking System Remains Resilient

The U.S. banking system remains resilient and on a solid foundation, Federal Reserve Governor Michelle Bowman said Tuesday, in a speech days after after the collapse of Silicon Valley Bank and Signature Bank.

"The U.S. banking system remains resilient and on a solid foundation, with strong capital and liquidity throughout the system. The Board continues to carefully monitor developments in financial markets and across the financial system," she said according to prepared remarks.

In a speech to community bankers, Bowman thanked them for supporting their communities and for "the ongoing strength of the U.S. economy." The Fed Board Sunday announced that it will make additional funding available to eligible banks through a newly created Bank Term Funding Program.

The bond market is pricing in a nearly 80% chance of a 25 basis point hike next week from the Fed. (See: MNI INTERVIEW: Fed Likely To Hike 25BPs Next Week- Ex Official)

"If we look at the financial health of small banks today, we see an industry that is well positioned to support economic growth. Across a broad range of metrics, including capital, liquidity, earnings, credit quality, and loan growth, small banks have been performing well," she said. Bowman is chair of the Fed's subcommittee on smaller regional and community banking and a member of the committee on supervision and regulation.

"While bank regulators do not want to hinder innovation, we also have a responsibility to ensure that the banking industry adopts new technologies appropriately," she said.