Economist

FRB vice chair for supervision bowman announces five-region supervisory structure and further regulatory reforms. LinkedIn Facebook X On October 6, 2026, Federal Reserve Vice Chair for Supervision Michelle Bowman delivered a speech at the Community Banking Research Conference in St. Louis outlining the next phase of the Federal Reserve's regulatory and supervisory reforms. The most significant announcement was an organizational change: the Federal Reserve will begin realigning its supervisory function into five regions, rather than the current alignment along the twelve Reserve Bank districts, with a regional leader accountable for supervisory activity in each region. Vice Chair Bowman also previewed further changes to regulatory thresholds and the large bank tailoring framework, while discussing ongoing work on supervisory ratings and community bank regulation. A new structure for supervision. Vice Chair Bowman linked the reorganization to concerns identified in the Starling Advisory Group's preliminary independent review of Silicon Valley Bank's failure. As she described it, the existing structure separates responsibility for supervision at the Vice Chair for Supervision level from its execution by the Reserve Banks. A proliferation of committees has further complicated decision making, delayed action and obscured accountability. The new structure, informed by the Conference of State Bank Supervisors' regional approach, will follow state boundaries rather than Reserve Bank District boundaries. Each regional leader will be accountable for all supervisory activity within the region. Existing Reserve Bank locations will continue to support the supervisory function, and examiners will remain in those locations and continue supervising their current banks. Bowman expects the changes to improve coordination with state and federal regulators, simplify leadership and promote consistent supervision. For supervised institutions, the practical significance will depend on how the new structure changes escalation, decision making and coordination across examination teams. Updating thresholds and tailoring. Bowman also announced that the Board will consider proposals later this year to update fixed-dollar asset thresholds for inflation and economic growth and introduce a mechanism for adjustments every five years. Her rationale is that static thresholds can cease to reflect the policy judgments underlying them, imposing requirements that are no longer appropriately calibrated. She pointed to the July proposal to modernize Regulation O as an example of this work. According to Bowman, the insider lending regulation has not been comprehensively updated since 1979, and its original transaction limits now impose administrative burdens beyond what is necessary for safety and soundness. Separately, the FRB will consider broader changes to supervisory portfolios defined by asset size and to the large bank tailoring framework. Bowman questioned the continued suitability of the $10 billion community bank threshold, particularly where a bank's growth places a straightforward business model into a supervisory tier designed for more complex institutions. She favors expanding community bank treatment for institutions engaged in traditional relationship banking, while recognizing that a bank's activities and risk profile could justify movement in either direction. The speech provides no replacement threshold or specific changes to the large bank categories. Financial risk and supervisory ratings. A recurring theme was supervision focused on risks capable of producing material financial harm. Vice Bowman described the Statement of Supervisory Operating Principles as the starting point for a cultural change, supported by examiner training, outreach and structural reforms. Examiners are expected to identify material vulnerabilities early, exercise reasoned judgment and take proportionate action. Vice Chair Bowman also emphasized that supervisory expectations should be clear and communicated in advance. She cited the publication of LISCC examination manuals and community bank third-party risk-management guidance as steps toward greater transparency. The agencies and state regulators, working through the FFIEC, are moving toward finalizing revisions to CAMELS. Bowman described the proposal as clarifying rating components and their contribution to composite ratings, with greater emphasis on material financial risks. In particular, the Management component would no longer singularly drive the composite rating. These remain proposed revisions; the speech does not announce a final CAMELS framework. Additional community bank priorities. Bowman reviewed completed initiatives, including reducing the community bank leverage ratio to 8 percent and eliminating the Novel Activities Supervision Program. She then identified three areas requiring further work. First, she criticized the Federal Reserve's bank merger competitive analysis for understating competition from credit unions, nonbank lenders, farm credit institutions and branchless banks, especially in rural and underserved markets. Second, she called for more concrete support for de novo formation through clearer approval standards, reasonable processing timelines and conditional approvals where appropriate. Third, she highlighted the FFIEC's December 2025 request for information on streamlining call reports. The speech does not announce new merger standards, binding application deadlines or final reporting changes. Final thoughts. The speech moves Vice Chair Bowman's reform agenda into the organization of supervision itself. Its significance extends beyond community banks, given the planned changes to supervisory leadership and the large bank tailoring framework. Institutions should watch for the forthcoming threshold and tailoring proposals and the details of the regional realignment. Whether the reforms produce more consistent and timely supervision will turn on their implementation. Vice Chair Bowman's stated objective remains risk-focused oversight supported by strong capital and liquidity.

Millennium's new man in London has been around. 8 hours ago Millennium is hiring in London. Drew Gillanders is not the only veteran joining the fund. Nick Howard, a veteran fixed income guy who began his career nearly 40 years ago at the Federal Reserve, has also joined as a senior advisor. Howard is a well known figure in London, having worked for JPMorgan, Salomon Brothers, Barclays and Rokos Capital Management, where he was at one point CEO and chief risk officer. In 2023, Howard left Rokos and made an unexpected move to Santander, where he was given the long title of 'head of senior relationship management for markets and head of economics and FICC strategy.' In this role, he hired such people as Antonio Garcia Pascual from the IMF as the global head of economics at Santander's CIB. Now Howard has moved on again. He didn't respond to a request to comment for this article, but the FCA Register shows him officially leaving Santander in late July and promptly joining Millennium in early September. It's not clear what a senior advisor does. Millennium didn't respond to a request to comment. Follow me on X. Follow me on LinkedIn. Have a confidential story, tip, or comment you'd like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Signal: sarahbutcher.22 Click here to fill in our anonymous form, or email [email protected]. Bear with us if you leave a comment at the bottom of this article: comments are moderated intermittently by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. You must take sole responsibility for comments you post on this site. We will take reasonable steps to weed out anything that we consider to be offensive or inappropriate. The essential daily roundup of news and analysis read by everyone from senior bankers and traders to new recruits. Boost your career. Find thousands of job opportunities by signing up to eFinancialCareers today. Top Articles Recommended Jobs Oxford Knight London, United Kingdom Oxford Knight London, United Kingdom

Federal Reserve's FRED Connector lets AI tap 850,000 data series. 2 October 2026 The Federal Reserve just handed artificial intelligence a direct line into one of the most widely used economic databases in the world, and the move says as much about who is actually using government data today as it does about the technology itself. On October 1, 2026, Federal Reserve Board Governor Christopher J. Waller announced the launch of the FRED MCP Connector at FRED Con, a conference hosted by the Federal Reserve Bank of St. Louis. The new tool lets AI agents plug straight into FRED, the St. Louis Fed's sprawling economic database, instead of relying on humans to click through menus and charts. Key takeaways. * The Federal Reserve FRED Connector, officially the FRED MCP Connector, was unveiled by Governor Christopher J. Waller on October 1, 2026, at FRED Con. * AI agents already generate nearly half of FRED's website traffic, according to Waller. * FRED houses more than 850,000 economic data series drawn from sources such as the Bureau of Economic Analysis, the Bureau of Labor Statistics, and the Census Bureau. * The connector runs on the Model Context Protocol (MCP), works with tools like Claude, and needs no separate API key. * Waller warned that AI-driven interpretation of the data can still produce inaccuracies, hallucinations, and mislabeled sources. Federal Reserve unveils FRED MCP Connector for AI integration. The core idea behind the Federal Reserve FRED Connector is simple: let AI assistants talk directly to FRED without forcing every developer to build a custom bridge. Waller used FRED Con, the St. Louis Fed's own conference, as the stage to introduce the tool and frame it as a response to how people already search for economic numbers. FRED is not a small database. It holds more than 850,000 economic data series, pulling figures from sources including the Bureau of Economic Analysis, the Bureau of Labor Statistics, and the Census Bureau. Historically, reaching that data meant navigating FRED's own search tools and interface, built for human eyes. The new connector changes that path. It runs on the Model Context Protocol, or MCP, which works something like a universal power adapter for AI systems. Rather than building a separate custom connection for every AI tool that wants to reach FRED, MCP gives developers and AI agents a shared, standardized plug. In practical terms, a user's AI assistant can now query FRED directly, locate a specific series, pull the numbers, and work with them without the person ever opening a browser tab to FRED itself. The connector is compatible with AI tools such as Claude, and notably, it does not require a separate API key to use. That access point also supports what the St. Louis Fed calls BYOAI, or "Bring Your Own AI." Instead of forcing users into one proprietary assistant, FRED lets people stick with whatever AI tool they already trust and use, and meets them there through the connector. FRED database scale and AI usage trends. The scale of FRED's data library explains why a connector like this matters, but the traffic numbers explain why the Fed built it now. Waller said AI agents already account for nearly half of all visits to the FRED website, a striking share for a government data platform that for decades served mostly human researchers, economists, and journalists typing queries by hand. That shift did not happen quietly. FRED's overall traffic is growing at an annual rate of 150%, and AI agents make up roughly half of that expanding volume. In other words, the audience for America's economic data is increasingly made of machines, not people clicking through charts. Why this matters: when nearly half of a platform's users are automated systems rather than humans, the old rules of web design, data labeling, and even security start to look outdated. A database built for a person reading a chart is not necessarily built for a bot trying to parse that same chart's underlying numbers correctly. Redesigning FRED for AI compatibility and future enhancements. FRED's own structure is being reworked to match how AI systems actually consume data, not just how people browse it. Waller said the platform's traditionally human-centric design needs to evolve into something AI systems can rely on consistently, which means investing in sharper documentation and tighter precision around how data is labeled and described. That overhaul goes beyond simply opening a connector door. Waller indicated that FRED plans to add further AI-driven features aimed at improving how users access, visualize, and interpret economic data going forward. Natural-language search and more interactive tools are part of that broader roadmap, though specifics on timing were not detailed. This points to a bigger strategic bet: rather than treating AI traffic as an inconvenience to manage, the Fed appears to be treating it as the primary audience to design for. Given that AI agents already generate close to half of FRED's traffic and that volume keeps climbing at 150% a year, retrofitting the platform around human browsing habits alone would likely leave the system increasingly mismatched with how it's actually used. Risks and challenges highlighted by Governor Waller. Waller did not present the connector as a flawless fix, and he was candid about where things can still go wrong. He cautioned that AI-driven interpretation of economic data carries real risks, including inaccuracies and outright hallucinations, where an AI system generates a plausible-sounding but incorrect figure or explanation. He also flagged source misattribution as a specific concern. An AI tool might pull the correct number from FRED but credit it to the wrong government agency, creating confusion for anyone downstream who trusts that citation. Since FRED aggregates data from multiple sources, including the Bureau of Economic Analysis, the Bureau of Labor Statistics, and the Census Bureau, getting the attribution wrong isn't a minor slip; it can mislead researchers relying on that sourcing to judge how reliable a figure is. Waller's remarks also pointed to a growth problem that is as much engineering as it is design. Sustaining accuracy and speed while traffic climbs at 150% annually is its own technical puzzle, separate from the question of whether the data itself is being read correctly. Why this matters: as more AI agents tap into official economic data through tools like the Federal Reserve FRED Connector, the margin for error compounds. A single hallucinated statistic or misattributed source, repeated across thousands of automated queries, could spread faster and further than a one-off human mistake ever would. Article produced with the assistance of artificial intelligence and reviewed by the editorial team. Satoshi Voice is an advanced artificial intelligence created to explore, analyze, and report on the world of cryptocurrency and blockchain. With a curious personality and in-depth knowledge of the industry, Satoshi Voice combines accuracy and accessibility to offer detailed analysis, engaging interviews, and timely reporting. Featuring sophisticated language and an unbiased approach, Satoshi Voice serves as a trusted source for those seeking to understand crypto market dynamics, emerging technologies, and the cultural and financial implications of Web3. This article was produced with the support of artificial intelligence and reviewed by its team of journalists to ensure accuracy and quality. 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