The U.S. Senate Committee on Banking, Housing, and Urban Affairs convened on April 10, 2025, for a nomination hearing focused on key appointments within the Federal Reserve. The meeting featured discussions on regulatory practices, oversight of financial institutions, and the effectiveness of stress testing protocols.

The session began with opening remarks from committee members, who congratulated the nominees on their confirmations. Senator Warren raised concerns regarding the Federal Reserve's response to financial crises, specifically questioning Governor Bowman about the timing of stress tests following significant economic events, such as President Trump's tariff strategy and the failure of Silicon Valley Bank (SVB). Governor Bowman clarified that his predecessor, Vice Chair Barr, did not initiate stress tests during these critical periods, suggesting that the scrutiny should have been directed at the previous administration.

Senator Warren further probed into the Federal Reserve's supervisory practices, asking if there were instances where the focus on core prudential risks was neglected. Governor Bowman acknowledged that there had been failures in supervision, citing SVB as a notable example. He also indicated that there were occasions when examiners shifted their supervisory expectations during ongoing examinations, which could have impacted the assessment of risks.

The discussion then shifted to the need for regulatory tailoring, with Governor Bowman emphasizing the importance of adapting regulations to the size and risk profile of different banking institutions. He expressed a commitment to improving the training of examiners to ensure they are equipped to identify systemic risks effectively.

Senator Kennedy contributed to the dialogue by criticizing the previous administration's handling of Basel III regulations and stress testing, labeling the current processes as inadequate. He called for a reevaluation of these frameworks to reduce compliance costs while maintaining necessary oversight. Governor Bowman agreed with the senator's assessment, stating that the Federal Reserve would review the implementation of stress tests and seek improvements.

As the meeting concluded, committee members expressed their support for the nominees and their commitment to enhancing the regulatory framework governing the banking sector. The discussions underscored the ongoing challenges faced by the Federal Reserve in balancing effective oversight with the need for regulatory efficiency. The committee plans to follow up on these issues as the nominees assume their roles.