Michelle W. Bowman said the Financial Stability Board should finalize its consultation report on Sound Practices for Responsible Adoption of Artificial Intelligence later this year, after staff review feedback from banks, regulators and other readers. She made the case at a Financial Stability Board Virtual Outreach Event, where she said Federal Reserve staff and the FSB Secretariat are eager to consider and incorporate comments so the work can move forward as a US G20 deliverable.
The report sits at a moment when AI use is moving quickly through financial institutions of all sizes, and the Federal Reserve has been watching that shift for nearly a decade. Bowman, who chairs the FSB’s Standing Committee on Supervisory and Regulatory Cooperation, framed the effort as a way to support responsible innovation while giving institutions a common reference point for governance and controls.
The report was not written in a vacuum. Hern Shin Ho of the Monetary Authority of Singapore led the work stream that produced it, FSB Secretariat staff supported the draft, and Treasury and the SEC worked with US colleagues on the effort. The report itself offers examples and in-depth case studies to show what governance and controls can look like in similar settings, while making clear that its practices are not the only way to adopt and use AI responsibly or manage AI risks.
That caveat is where Bowman drew a sharper line. She said financial institutions should be specific about how they use AI and whether that use is material to business operations or to legal and regulatory obligations. For a report aimed at responsible adoption, that is the part that matters most: the guidance is meant to widen the path for innovation, not blur the point at which AI becomes a governance and compliance issue that firms have to define plainly for themselves.
What changes next will depend on the feedback the Federal Reserve and FSB Secretariat are still seeking and whether it leads to tighter examples, clearer language or a narrower set of sound practices before the report is finalized later this year. Bowman’s remarks suggest the broad direction is already set. The remaining question is how specific the final version will be when it lands as a US G20 deliverable.
