The Fed: Fed’s Bowman talks up community bank resilience as she notes pressures from commercial real estate, agriculture

This post was originally published on this site
Bloomberg News/Landov

Fed Governor Michelle Bowman is the first official to fill the role created by Congress for someone with community banking experience on the central bank’s board.

In her first speech since joining the central bank in November, Fed Governor Michelle Bowman said Monday that the health of the community banking sector has “improved significantly” since the financial crisis as she also raised concerns about commercial real estate and the agricultural sector.

Bowman noted that there were no community bank failures in 2018.

“Our job now is to ensure that community banks continue to remain strong,” Bowman said.

Bowman is the first Fed governor to fill the role created by Congress for someone with community banking experience to serve on the central bank’s board.

Prior to her appointment, Bowman was the state bank commissioner of Kansas. She also was a senior executive of Farmers and Drovers Bank, a community bank in Council Grove, Kan., that her great-great grandfather helped charter in 1882.

Bowman said she would travel widely in her new post and urged community bankers to voice their concerns about regulation.

“This dialogue is especially important as we continue to work to tailor our supervision and regulation to the size and risk profile of the institutions we oversee,” she said.

The Fed is trying to reduce regulatory burdens on the sector, while maintaining safety and soundness, she noted.

Bowman noted that concentrations of commercial real estate are rising at some banks and the Fed is reminding bankers “of the difficulties that such concentrations presented in the past.”

Another focus will be on concentrations of agricultural credit.

While there is no legal definition of a community bank, the FDIC said a $10 billion size limit has come to be used to define the sector.

Three out of four community banks hold assets of less than $500 million, Bowman said. While they hold just 17% of financial industry assets, the are responsible for about 53% of bank lending to small businesses, she added.

Be Sociable, Share!

Related Posts


MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.

This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.

The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The educational training program and software services are provided to improve financial understanding.

The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.