practices of such firms have been outgrowing our existing supervisory approaches. at the same time, the role of these banks in our financial systems continues to grow. in my judgment, we have no alternative but to adopt, as soon as practical, approaches that are appropriately suited to the task of bank supervision of our larger banks in the twenty - first century. the basel ii framework is the product of extensive multiyear dialogues with the banking industry regarding state - of - the - art risk - management practices in every significant area of banking activity. accordingly, it provides a roadmap for the improved regulation and supervision of global banking. basel ii will provide strong incentives for banks to continue improving their internal risk - management capabilities as well as the tools for supervisors to focus on emerging problems and issues more rapidly than ever before. i am pleased to appear before you today to report on this effort as it nears completion. open discussion of complex issues has been at the heart of the basel ii development process from the outset and no doubt will continue to characterize it as basel ii evolves further.

for release on delivery 11 : 00 a. m. edt ( 10 : 00 a. m. local time ) october 2, 2024 building a community banking framework for the future remarks by michelle w. bowman member board of governors of the federal reserve system at the 2024 community banking research conference sponsored by the federal reserve system, the conference of state bank supervisors, and the federal deposit insurance corporation st. louis, missouri october 2, 2024 it is an honor to return to st. louis for the 12th year of the community banking research conference. 1 this conference is a model of effective partnership between the federal reserve and the conference of state bank supervisors, and more recently, the federal deposit insurance corporation ( fdic ). it is an opportunity for us all to dig deeper into the community banking model and the important role of community banks now and into the future. together, regulators work to ensure that the approach to supervision and regulation is fit for purpose, and that each element of both supervision and regulation acts in a complementary manner. policy disagreements are a healthy part of the process, but we must also strive to build consensus where we can. at a minimum, we must understand and respect our counterparts ’ and colleagues ’ viewpoints. ultimately, we all share the same goal of promoting a safe and sound banking system. the strength of the u. s. banking system relies upon the diversity of its institutions, and facilitating an environment that allows each category of bank to thrive is essential to fostering a healthy financial system. for community banks, this includes building a framework that better supports the unique characteristics of these institutions. today, my remarks will consider three foundational questions as we contemplate revising the community banking framework : ( 1 ) given the continued evolution of the banking system, how should a community bank be defined? ( 2 ) are we pursuing the most appropriate approach to supervision and regulation of community banks, and finally, ( 3 ) how can we build a policy framework that better supports and anticipates this evolution of the banking system now and into the future? these remarks represent my own views and are not necessarily those of my colleagues on the federal reserve board or the federal open market committee. - 2how to define a community bank by necessity, regulators divide banks into more manageable categories. the federal reserve has distinct portfolios that oversee “ community, ” “ regional, ” and four “ categories ” of larger banks. 2 the federal reserve and federal banking agencies further subdivid