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My testimony today will focus on two areas. First, the current state of the banking sector, as detailed in the fall 2025 Supervision and Regulation Report, which accompanies my submission to the Committee. Second, progress on my priorities as Vice Chair for Supervision since my confirmation earlier this year. My priorities relate to the efficiency, safety and soundness, and stability of our financial system and the effectiveness and accountability of our regulation and supervision of that system. The financial sector plays a critical role in our economy because it serves as an essential intermediary to channel savings into productive investments and enable the flow of money, credit, and capital throughout the economy. Our supervision and regulation must support a safe and sound banking system that fosters economic growth while also safeguarding financial stability. Banking Conditions Let me begin by providing an update on banking conditions. As the Supervision and Regulation Report shows, the banking system remains sound and resilient. Banks continue to report strong capital ratios and significant liquidity buffers, which position them well to support economic growth. The overall health of the banking sector is demonstrated by continued growth in lending, a decline in non-performing loans across most categories, and strong profitability. Notably though, nonbank financial institutions continue to increase their share of the total lending market, providing strong competition to regulated banks without facing the same capital, liquidity, and other prudential standards. Fed's Bowman: Working on capital and liquidity rules tied to Stablecoin Fed's Bowman: Nonbank firms increasing their share of the lending market.

I am deeply honored to have been asked to speak here today about the remarkable legacy of George Shultz. Just to be clear, I will not address current economic conditions or monetary policy. I have been an admirer of George Shultz since my college years. I saw him then and now as a great role model, as I mentioned a few months ago when delivering the Baccalaureate address to Princeton's class of 2025, 50 years after my own graduation. As I told the graduates, when I faced the world after college, I had no real plan, but knew that I wanted to combine a private-sector career with public service. I had in mind a few well-known public figures of the era, especially George Shultz, whose picture was on the wall of the Princeton eating club of which both of us were members. George may also have caught my attention because my dad was a labor lawyer who represented one of the major steel companies in collective bargaining. Like George, my father had both a belief in the collective bargaining process and a deep respect for workers. I followed George's career with interest through the years. It didn't occur to me that I would ever have the honor of meeting him. But I did meet him after I joined the Fed in 2012, as I visited Stanford from time to time. I remember energetic economic discussions at group lunches in his conference room at Hoover. George was also kind enough to host John Taylor, Michael, and me for a chilly round of golf on a rainy March day. Today, our focus is on George's extraordinarily broad economic accomplishments. I also want to celebrate the remarkable man and policymaker that he was. Several things stand out for me. He was a man who combined strong principles and unshakeable integrity with common sense and a practical, problem-solving approach to policy. He had a deep belief in the wisdom of markets and a desire to let them work whenever possible without government direction. That theme runs through many issues we will discuss, including collective bargaining, wage and price controls, and exchange rates. But he was not an absolutist and saw that there are sometimes market failures that should be addressed by public policy. As one of the most successful policymakers of his era, George brought the intellectual rigor of an academic to the practical, constrained, messy work of policymaking. Through four cabinet appointments, he dealt with many of the great issues of his day, with remarkable success. And he kept at it long after leaving public office, making important contributions on health care reform, climate change and nuclear disarmament. He may be less well known for this, but George Shultz was deeply concerned about racial discrimination in the workplace and our society more broadly. He consistently and effectively used his positions of authority to increase opportunities for minorities. He later noted that there was both a moral and an economic basis for this. He stuck to his principles while also treating people with honesty and respect, including those with whom he had policy disagreements.2 Labor leaders welcomed his appointment as Secretary of Labor. As many of his contemporaries remarked, faced with divergent views and difficult issues, he was extraordinarily good at steering people toward agreement. A key part of that strategy was to let the parties reach the final agreement themselves. That way, they owned the agreement and were more likely to honor it. His friendships and collaborations were beyond number, FED CHAIR POWELL DOES NOT COMMENT ON ECONOMY, MONETARY POLICY IN REMARKS PREPARED FOR DELIVERY AT STANFORD UNIVERSITY ...