Fed Governor Bowman Says Fed Shouldn't Intervene in Banks' AI Adoption on Tuesday

According to Fed Governor Bowman at a financial inclusion conference on Tuesday, banks should be allowed to decide when and how to adopt AI and other new technologies without federal intervention. Bowman stated that lending institutions better understand the risks associated with innovation and their customers' risk tolerance than the Fed does, so the central bank should set clear expectations, maintain transparency, and refrain from interfering with individual business decisions.

Meanwhile, Fed official Barr expressed cautious support for innovation but noted uncertainty about whether AI would help reduce or exacerbate income and wealth inequality.