The rapid evolution of artificial intelligence technologies reinforces the need for regulators to adopt adaptable supervisory guidance and expectations, Federal Reserve Vice Chair for Supervision Michelle Bowman said today.
In a speech on AI in the financial system, Bowman said regulators should support banks in implementing AI tools safely, effectively and efficiently. “Today, banks are relying on existing risk-management frameworks to guide their use of AI,” she said. “While these supervisory tools are intended to support banks in applying sound governance and risk management, we should assess whether our supervisory guidance is fit for the future.”
Bowman noted that the banking agencies recently amended their model risk management guidance to clarify that it does not apply to generative or agentic AI. She also said regulators are working to update and simplify their third-party risk-management guidance to reflect actual and future risk.
As an example of how quickly AI is evolving, Bowman pointed to Anthropic’s Mythos AI model and its potential to detect cybersecurity vulnerabilities that had previously gone unnoticed.
“We need to recognize that any regulatory or supervisory response must accommodate this evolution, regularly reviewing our approach and expectations, and communicating with industry,” she said. “Feedback from industry is an important part of this approach, including from banks, financial firms, service providers and other experts. These views will be extremely valuable as we refine our supervisory approach and response.”
