Federal Reserve Updates 2023 Policy for Banks to Encourage Responsible Innovation
The Federal Reserve has released a new policy statement concerning the approach to certain banks it supervises. This update aims to promote responsible innovation within the banking sector. The announcement was made public on December 17, 2025.
Overview of the New Policy Statement
The Federal Reserve Board has retracted its 2023 policy statement. The original statement restricted Board-supervised banks to activities allowed by other federal banking authorities. This limitation included specific references to innovative products and services.
Evolution of Financial Systems
In the years following the original policy statement, the financial landscape has significantly changed. The Federal Reserve has developed a deeper understanding of innovative banking products. Thus, the Board found the earlier restrictions outdated and inadequate.
Encouraging Responsible Innovation
According to Michelle W. Bowman, Vice Chair for Supervision, new technologies can enhance banking efficiency and enrich customer services. The updated guidelines are designed to help maintain a safe and sound banking environment while promoting modern practices.
- The new policy supports both insured and uninsured Board-supervised state member banks.
- It allows these banks to explore designated innovative activities.
Conclusion
The Federal Reserve’s shift reflects a commitment to fostering innovation in the banking sector. By developing new pathways for responsible innovation, the Board aims to keep banking operations effective and efficient in a rapidly evolving environment.
For further media inquiries, please contact the Federal Reserve at 202-452-2955.
