AI TRENDS | Bowman Says the Fed Should Not Over-Intervene in Banks’ Use of New Technologies

Fed Governor Michelle Bowman said the Federal Reserve should avoid excessive intervention in banks’ adoption of new technologies such as artificial intelligence. According to Jin10, Bowman said lenders understand the risks brought by innovation better and should be allowed to decide for themselves when to adopt technologies such as AI. Speaking at a conference on financial inclusion, she said when and how to innovate should be determined by each bank and its management, adding that banks know their customers, communities, and risk tolerance better than regulators do. Bowman also said the Fed should “set clear expectations, remain transparent, and not interfere with individual business decisions related to innovation.” Her remarks came as senior officials were assessing the impact of the rapid development of AI platforms, including a new Mythos AI model launched by Anthropic. Earlier on Tuesday at the same conference, Fed Governor Michael Barr said that while he welcomed innovation, it was still unclear whether AI would reduce or worsen income and wealth inequality.