Federal Reserve’s Bowman says regulation is pushing corporate lending out of banks and into shadow lenders
Crypto Briefing
Federal Reserve Governor Michelle Bowman argues that excessive banking regulations are driving corporate lending toward less-regulated shadow lenders.Summary
Federal Reserve Vice Chair for Supervision Michelle Bowman asserts that post-2008 banking regulations, specifically Basel III, have made direct corporate lending prohibitively expensive for banks. Consequently, corporate credit has shifted from regulated banks to nonbank private credit funds. Bowman argues that these regulations create unintended risks by pushing lending into sectors with lower oversight and transparency. She proposes recalibrating capital requirements to ensure that regulatory costs better reflect actual risk, rather than incentivizing indirect lending through private funds.
(Source：Crypto Briefing)