Michelle W Bowman: Opening remarks on Sound Practices for Artificial Intelligence
Opening remarks (virtual) by Ms Michelle W Bowman, Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, at the Financial Stability Board Virtual Outreach Event, 7 July 2026.
Ms. Michelle W. Bowman, Vice Chair for Supervision of the Board of Governors for the Federal Reserve System, delivered opening remarks at a virtual Financial Stability Board Outreach Event on July 7, 2026. She expressed gratitude for the chance to discuss the FSB's consultation report on Sound Practices for Responsible Adoption of Artificial Intelligence.
Both Federal Reserve staff and FSB Secretariat staff are eager to incorporate feedback to finalize the report later this year as a U.S. G-20 deliverable. The report's development was led by Hern Shin Ho from the Monetary Authority of Singapore, with support from FSB Secretariat staff. Other U.S. collaborators included the Treasury and the SEC.
As FSB Chair for Supervisory and Regulatory Cooperation, Bowman initiated work on sound practices for financial institutions in the responsible adoption and use of AI. She noted that AI use has rapidly increased, and financial institutions are successfully addressing AI risks, which informs the report's content. The Federal Reserve has monitored AI bank usage for nearly a decade, observing a notable uptick in usage by banks of all sizes.
To manage AI risks, understanding specific use cases is crucial, with the report providing in-depth case studies and governance examples. Bowman emphasized the importance of determining the materiality of AI use, as it helps guide the governance and control measures needed. The report suggests lighter supervision for lower-risk AI uses, with a significant focus on proportionality.
The guidance is designed to support innovation for financial institutions of all sizes, not just the largest. Bowman welcomes feedback on the report's balance on proportionality for AI adoption and use. She encourages identifying areas where the practices may be too prescriptive or fail to account for institutional differences. The feedback will help inform the final report, which the U.S. will present to the G-20 presidency later this year.
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