The Fed Is Cutting Bank Oversight. Critics See Risks. Nov. 17, 2025 Top officials at the Federal Reserve’s Washington headquarters and 12 reserve banks received a short memo on Oct. 29 with an unmistakable message. The way the central bank had long monitored and addressed risks across the financial system was in for a drastic overhaul. The memo, which was reviewed by The New York Times, contained a list of directives for Fed examiners and supervisory staff across the country that significantly curtailed how closely they scrutinized lenders. It followed a host of changes made by Michelle W. Bowman, a Fed governor, who since becoming vice chair for supervision at the start of the summer had been providing regulatory relief to banks. One day after the memo was sent, Ms. Bowman announced a 30 percent cut in staff across her division in Washington. Current and former policymakers and legal experts were already worried that those changes would encourage exactly the kind of risk-taking ...
