Category: 3. Business

(Bloomberg) — Wall Street’s summer calm cracked as a selloff in big tech sent major stock gauges lower, underscoring the market’s narrow reliance on a handful of growth giants.

The Nasdaq 100 slid 1.5% — its second-worst drop since April’s tariff shock — led by a rout in Nvidia Corp. That pressure overwhelmed gains in over 300 S&P 500 names, exposing the fragility of an index propped up by megacap muscle. Home Depot Inc.’s results lifted big-box retailers, while Intel Corp. jumped as the US is ironing out the details of a deal for the US to take a 10% stake.

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Treasuries rose ahead of Jerome Powell’s Jackson Hole speech Friday, with traders firming up bets on a September cut. Ten-year yields slid three basis points to 4.30%. S&P Global Ratings said revenues from tariffs will help soften the blow to the US’s fiscal health from tax cuts, enabling it to maintain its current credit grade. The crypto world was engulfed in the rout in riskier assets.

Positioning across US equity markets remains at elevated levels following a strong second-quarter reporting season, according to Citigroup Inc. strategists including Chris Montagu. Individual investors are likely to slow their torrid pace of stock buying in September before resuming later this year, said Scott Rubner at Citadel Securities.

“It is always easier when the markets are going up,” said Nicholas Bohnsack at Strategas. “It is difficult to poke holes in the bull case; the path of least resistance is likely higher, but we find ourselves increasingly worried that traditional risk assets (stocks and bonds) appear priced to perfection.”

Options traders worrying about tech weakness after a torrid surge have been trying to protect themselves with “disaster” puts on the Invesco QQQ Trust Series 1 ETF, according Jeff Jacobson at 22V Research. A measure showing the difference between the cost of hedging against a sharp downturn and a smaller one is at an almost three-year high.

Earlier this month, Bank of America Corp. strategists led by Michael Hartnett said the rally that’s propelled the so-called Magnificent Seven stocks about 40% higher since April looks stretched. Hartnett has repeatedly warned of a bubble risk in US stocks this year.

The technology sector reclaimed its spot as the S&P 500’s top performer last quarter, helping indexes rise to all-time highs, noted Bret Kenwell at eToro. While valuations appear stretched, elevated growth expectations help justify prices, and AI enthusiasm as well as momentum can help keep tech in the driver seat, he said.

“Whether money continues to flow into the ‘Magnificent Seven’ leaders or rotate within the group, investors will likely look for tech’s continued leadership in the second half of 2025,” he noted.

Traders are also gearing up for Powell’s speech on Friday in Jackson Hole, Wyoming, with the Treasury market seeing a quarter-point rate cut next month as virtually a lock and at least one more by year-end.

“As the market readies for Powell’s speech at Jackson Hole, we’ll argue that the biggest risk for Treasuries is if the Fed chief chooses to throw cold water on the widely anticipated September rate cut,” said Ian Lyngen at BMO Capital Markets.

While this is not Lyngen’s base-case scenario, he says the front-end of the curve is vulnerable to a correction if Powell doesn’t deliver on the degree of dovishness currently anticipated.

Investors are waiting to see if Powell affirms the market pricing — or pushes back with a reminder that new data arriving before the next policy gathering could change the picture. They’re also looking for clues about the longer-run trajectory of Fed cuts into next year.

“The market is all but pricing in a certainty for rate cuts in September and we agree with the market’s expectations,” said Stephen Schwartz at Pioneer Financial. “Rate cuts are warranted as financial conditions are too tight right now given the softening of the inflation data and the cracks we are starting to see in the labor market.”

A couple of weeks ago, when the latest jobs report revealed a slump in hiring, the case for lower rates appeared all but closed. Then came the sharpest spike in US wholesale prices in three years – fuel for the concern about tariff-led inflation that’s kept Fed officials on hold so far this year.

While the recent inflation data has been volatile with some conflicting signals, Schwartz says there’s a market perception that the inflation surge from 2022 is behind us.

“While we expect some near-term volatility, we believe markets will continue to move past the inflation situation, and that the economy and the US consumer are strong enough to continue growing,” he said.

At Bank of America Corp., strategists including Mark Cabana and Meghan Swiber say they don’t think Powell will sound as dovish as the market expects.

“Powell’s reaction function to recent stagflationary data will be key,” they noted. “Will he be spooked by jobs revisions or lean into the labor supply slowdown?”

In an interview with Bloomberg Television, Fed Governor Michelle Bowman deflected when asked if she would be interested in leading the central bank as chair.

On the geopolitical front, President Donald Trump urged Russia’s Vladimir Putin and Ukraine’s Volodymyr Zelenskiy to show some “flexibility” as the US president accelerates his efforts to end the war in Ukraine and encourages the two leaders to hold a bilateral summit.

“While there’s a sense that the path to peace is at least slightly clearer, traders remain wary,” said Fawad Razaqzada at City Index and Forex.com. “And rightly so – the toughest conversations, namely over territory, still lie ahead.”

Corporate Highlights:

SoftBank Group Corp. agreed to buy $2 billion of Intel Corp. stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. Meta Platforms Inc. is splitting its newly formed artificial intelligence group into four distinct teams and reassigning many of the company’s existing AI employees, an attempt to better capitalize on billions of dollars’ worth of recently acquired talent. Palo Alto Networks Inc. gave a stronger-than-expected annual forecast, as the company seeks to provide customers with a bundle of AI-enabled cybersecurity products to fend off attacks. Apple Inc. is expanding iPhone production in India at five factories, including a pair of recently opened plants, as it seeks to lessen its reliance on China for US-bound models. Tesla Inc. priced its new six-seat Model Y sport utility vehicle in the same range as local rival Li Auto Inc.’s extended-range L8 model to win over middle-class families in China’s hyper-competitive market. Commerce Secretary Howard Lutnick said he’d support consolidation as a means to make the US freight rail industry more efficient, a potential boost for Union Pacific Corp.’s $72 billion takeover of Norfolk Southern Corp. Ford Motor Co. and South Korea’s SK On are seeking buyers for excess battery supply produced at their new joint-venture Kentucky factory, underscoring the waning demand for electric vehicles in the US. Viking Therapeutics Inc.’s experimental obesity pill disappointed in a mid-stage study, marking another weaker-than-expected result for an oral alternative to popular weight-loss injections. Starbucks Corp. will give all salaried employees in North America a 2% raise this year as the coffee chain looks to pull off a high-stakes turnaround and manage expenses. Anglo American Plc suffered a major setback to its restructuring plans after Peabody Energy Corp. decided to walk away from a $3.8 billion deal to buy its steelmaking coal business following a fire at an Australian mine. US power and natural gas utilities Black Hills Corp. and NorthWestern Energy Group agreed to merge in a $3.6 billion deal that underscores the boom for electricity demand that’s being unleashed by data centers. Nexstar Media Group Inc. has agreed to buy TV station operator Tegna Inc. for $3.5 billion in a cash deal that stands to dramatically expand Nexstar’s reach to 80% of US households and test the Trump administration’s appetite for consolidation. Medtronic Plc will expand its board after Elliott Investment Management became one of its biggest investors. The medical devices maker also reported profit that beat estimates and lifted full-year earnings guidance. Amer Sports Inc. shares fell after one of its key divisions posted the slowest sales growth on record. Air Canada will restart flights Tuesday evening after reaching a deal with flight attendants to end a three-day walkout that led to mass cancellations during the busy summer season and upended the carrier’s financial outlook. BHP Group’s full-year underlying profit fell by more than a quarter to its lowest level since the pandemic, broadly in line with market expectations, as prices of its key earners — iron ore and coking coal — came under pressure from softer Chinese demand. Shein Group Ltd. has considered moving its base back to China in the hopes that it would help sway Beijing authorities to sign off on the fast-fashion retailer’s plans to go public in Hong Kong, according to people familiar with the matter. What Bloomberg Strategists say…

“The Fed’s current stance of remaining open to rate cuts because of benign inflation data is the Goldilocks scenario that’s both keeping the Treasury curve from steepening, and allowing the Magnificent Seven earnings and wider S&P 500 margin story to reign supreme.”

— Edward Harrison, Macro Strategist, Markets Live.

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Some of the main moves in markets:

Stocks

The S&P 500 fell 0.7% as of 3:03 p.m. New York time The Nasdaq 100 fell 1.5% The Dow Jones Industrial Average fell 0.1% The MSCI World Index fell 0.5% Bloomberg Magnificent 7 Total Return Index fell 1.8% The Russell 2000 Index fell 0.9% S&P 500 Equal Weighted Index rose 0.3% Intel rose 7% Currencies

The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.1% to $1.1645 The British pound fell 0.2% to $1.3483 The Japanese yen rose 0.2% to 147.53 per dollar Cryptocurrencies

Bitcoin fell 3.1% to $112,852.42 Ether fell 4.6% to $4,132.87 Bonds

The yield on 10-year Treasuries declined three basis points to 4.30% Germany’s 10-year yield declined one basis point to 2.75% Britain’s 10-year yield was little changed at 4.74% The yield on 2-year Treasuries declined one basis point to 3.75% The yield on 30-year Treasuries declined three basis points to 4.90% Commodities

West Texas Intermediate crude fell 1.5% to $62.49 a barrel Spot gold fell 0.4% to $3,318.61 an ounce ©2025 Bloomberg L.P.

Global law firm K&L Gates LLP advised Commonwealth Fusion Systems (CFS) during the negotiations of a power purchase agreement with Google. CFS, through its first ARCTM power plant – the world’s first grid-scale fusion power plant – plans to deliver fusion power onto the electrical grid in the early 2030s.

Through the agreement, Google will purchase 200 megawatts of power from CFS’s ARC fusion power plant, which is expected to be built in Virginia. This partnership signifies CFS and Google’s commitment to advancing fusion energy and the companies’ visions for a fusion-powered future.

The cross-disciplinary and multi-office team was led by Portland of counsel Bill Holmes and Pittsburgh associate Samantha DeLee. Washington, DC partners Kimberly Frank, Cheryl Isaac, and Marty Pugh also assisted on the matter.

Bill Holmes noted that it was a “great opportunity to work on this cutting-edge transaction and an absolute pleasure working with the CFS team. It has been truly exciting to have been part of this groundbreaking effort.”

Rick Needham, Chief Commercial Officer of CFS, stated: “It’s quite the feather in the cap to say we all negotiated and closed the first true bilateral fusion PPA and the largest fusion deal in history – so far. We’re grateful for the keen insights from the K&L Gates team as we navigated this partnership and look forward to their continued support as fusion energy becomes widespread.”

Global law firm K&L Gates LLP has advised Anavex Life Sciences Corp. (Nasdaq: AVXL), a clinical-stage biopharmaceutical company pioneering innovative therapies for central nervous system (CNS) disorders, in a US$150 million at-the-market (ATM) public offering of common stock. TD Securities (USA) LLC acted as placement agent for the transaction.

Anavex is focused on developing treatments for a range of neurological and neurodevelopmental conditions, including Alzheimer’s disease, Parkinson’s disease, schizophrenia, Rett syndrome, and other rare and degenerative CNS disorders. The offering supports the company’s continued advancement of its clinical pipeline and strategic growth initiatives.

The K&L Gates team advising on the transaction included Miami partners Clayton Parker and Erin Fogarty with support from Miami associates David McDonald and Arielle Flamenbaum.

“We are proud to support Anavex in this important financing, which will help accelerate the development of therapies targeting some of the most challenging neurological conditions,” said Parker. “This transaction reflects the growing investor confidence in innovative biotech companies addressing unmet medical needs.”

K&L Gates’ Corporate practice is one of the most substantial in the legal industry, with hundreds of lawyers in offices on five continents, providing clients with practical legal solutions in the structuring, financing, and completion of domestic, international, and cross-border transactions.

First-line therapy with ribociclib (Kisqali), trastuzumab (Herceptin), and the aromatase inhibitor (AI) letrozole (Femara) with or without a GnRH agonist was effective with a manageable safety profile in patients with metastatic hormone receptor–positive, HER2-positive breast cancer, supporting the regimen’s use as a chemotherapy-free option in this population, according to data from the phase 1b/2 MINI trial (NCT03913234), which was conducted in South Korea.¹

Findings presented during the2025 ASCO Annual Meeting showed that, at median follow-up of 15.8 months (95% CI, 12.9-19.1), the median PFS in the phase 2 population (n = 77) was 30.4 months (95% CI, 19.6-not applicable [NA]). The median overall survival (OS) in this population was NA (95% CI, NA-NA).

The overall response rate (ORR) in the total study population (n = 90), comprising patients in both the phase 1b (n = 13) and phase 2 portions, was 60.7%. This included a complete response (CR) rate of 3.3% and a partial response (PR) rate of 53.3%. Stable disease (SD) was achieved by 36.7% of patients, no patients experienced disease progression, and 6.7% of patients were not evaluable (NE). The clinical benefit rate (CBR) in the overall population was 84.5%, and the median duration of response (DOR) was 12.2 months (range, 7.6-13.8).

In the phase 1b portion of the study, the ORR was 58.3%; the PR rate was 53.9%, the SD rate was 38.5%, and 7.7% of patients were NE. No patients achieved a CR. The CBR was 83.3%, and the median DOR was 17.5 months (range, 7.3-35.5).

In the phase 2 portion, the ORR was 61.1%, comprising CR, PR, and SD rates of 3.9%, 53.2%, and 36.4%, respectively. In total, 6.5% of patients were NE. The CBR was 84.7%, and the median DOR was 11.8 months (range, 7.6-13.4).

“The MINI trial reinforces the rationale for first-line use of CDK4/6 inhibitors as a chemotherapy-free strategy in HER2-positive, hormone receptor–positive metastatic breast cancer, aligning with the prior findings from [the phase 3] DETECT V [NCT02344472] and [phase 1/2] ASPIRE [NCT03304080] trials,” lead study author Joohyuk Sohn, MD, PhD, stated during an oral presentation of the data. Sohn is a professor in the Division of Medical Oncology in the Department of Internal Medicine at Yonsei Cancer Center, part of Yonsei University College of Medicine in Seoul, South Korea.

MINI Trial: Background, Design, and Baseline Characteristics

This multicenter, single-arm, prospective trial was conducted across 17 academic institutions in South Korea and comprised both a phase 1b and phase 2 portion.^1,2

Pre- and post-menopausal patients with hormone receptor–positive, HER2-positive metastatic breast cancer were enrolled onto both parts of the study. Other key eligibility requirements included no prior systemic treatment for metastatic breast cancer, and a baseline left ventricle ejection fraction within normal range. Prior exposure to neoadjuvant/adjuvant trastuzumab or endocrine therapy was not permitted, excepting patients with a disease-free interval of more than 12 months after their last dose of trastuzumab, and those more than 2 years out from their last dose of adjuvant endocrine therapy. Patients with stable central nervous system (CNS) metastases were allowed to enroll.

The phase 1b portion comprised a standard 3+3 design, in which 13 patients were treated with 8 mg/kg of trastuzumab as a loading dose, followed by 6 mg/kg every 3 weeks; 2.5 mg ofletrozole daily; and escalating daily doses of ribociclib (200 mg, 400 mg, and 600 mg) for 3 weeks on/1 week off, with or without a GnRH agonist.

In phase 2, all 77 patients were treated with the recommended phase 2 dose (RP2D) of ribociclib plus trastuzumab and letrozole, with or without a GnRH agonist.

The primary end point in phase 1b was the identification of the RP2D. In phase 2, the primary end point was PFS. Secondary end points included OS, overall response rate, duration of response, and safety. Of note, PAM50 testing was conducted to determine correlations between intrinsic subtype and treatment efficacy in the phase 2 patient population.

The median age of all patients in the study was 60 (range, 31-85).¹ Most patients had an ECOG performance status of 0 (60%) vs 1 (40%), were postmenopausal (84.4%), and had immunohistochemistry (IHC) 3+ HER2 expression (66.7%) vs IHC 2+ expression with positive in situ hybridization (33.3%). Almost all patients were also estrogen receptor–positive (96.7%), and 85.6% of patients were progesterone receptor–positive. Over half of patients had recurrent disease (58.9%), whereas 41.1% of patients had de novo stage IV disease. Most patients had 1 metastatic site (41.1%), followed by 2 (32.2%) and 3 or more (26.7%) metastatic sites. Metastatic sites included bone-only (12.2%), lung (48.9%), liver (27.8%), and the CNS (2.2%). Prior exposure to neoadjuvant/adjuvant therapy was reported in 33.3% of patients, with 47.8% of patients having previously received nonsteroidal AIs in the adjuvant setting.

Safety Data and PAM50 Analysis

The overall safety profile of the investigational combination was consistent with previously reported data with ribociclib plus endocrine therapy, Sohn reported. Any-grade adverse effects (AEs) occurred in all patients, 77.8% of which were grade 3 or higher. Serious AEs were reported in 17.8% of patients. Dose reductions were required for 33.3% of patients, and 7.8% of patients experienced AEs leading to permanent treatment discontinuation. One patient died due to an aortic aneurysm.

The most common hematologic toxicity was neutropenia (any-grade, 66.7%; grade ≥ 3, 63.3%), followed by anemia (18.9%; 5.6%). The most frequent nonhematological AEs were pruritus (24.4%; 0.0%), nausea (22.2%; 0.0%), arthralgia (18.9%; 5.6%), rash (16.7%; 1.1%), and elevated alanine transaminase levels (15.6%; 2.2%). AEs of special interest included decreased ejection fraction (2.2%; 0.0%), heart failure (1.1%; 1.1%), and QTc prolongation (1.1%; 0.0%).

PAM50 subtype distribution and survival analysis (n = 77) showed an even distribution among luminal A (31.2%), luminal B (36.4%), and HER2-enriched (31.2%) subtypes; the incidence of basal subtype was low, at 1.3%. No significant correlation between intrinsic subtype and median PFS was observed (P = .8326).

References

1. Sohn J, Lim S, Jeong JH et al. Phase IB and II study of ribociclib with trastuzumab plus endocrine therapy in HR+/HER2+ advanced breast cancer patients: Korean Cancer Study Group BR 18-2 MINI trial. J Clin Oncol. 2025, 43(suppl 16):1016.doi:10.1200/JCO.2025.43.16_suppl.1016
2. Phase IB and II study of ribociclib with trastuzumab plus letrozole in postmenopausal HR+, HER2+ advanced breast cancer patients. ClinicalTrials.gov. Updated May 10, 2022. Accessed August 19, 2025. https://clinicaltrials.gov/study/NCT03913234

For more than a decade, Chevron has been pursuing oil and gas resources in Argentina’s Vaca Muerta Formation—and it’s not about to stop.

Chevron expects the region to have a larger role in its portfolio in coming years.

“We remain focused on Argentina and Vaca Muerta, where today we have an enviable unconventional resource position that can be scaled into a core asset within a relatively short time frame,” said Javier La Rosa, Chevron’s president of Base Assets and Emerging Countries.

Good afternoon and thank you to the organizers of the 2025 Wyoming Blockchain Symposium for inviting me to speak to you today.¹ It is an honor to be included in this year’s event, which is being held at a critical moment for American leadership in the digital asset space. We are at the beginning of what appears to be a seismic shift in the way we think about money, value, and the fabric of our financial system. This shift is not just about incremental changes or tweaks to the existing system. What we are witnessing has the potential to fundamentally transform the way we live, work, and interact in society.

It is inspiring to be together with all of you, as thought leaders engaged in developing technologies that could help shape the financial system in the future. You don’t need a tech background to appreciate the opportunity that blockchain provides to the financial system.

Financial services innovation drives faster, safer, cheaper, and more customized products that more efficiently meet the needs of consumers and businesses. Digital processes like wire transfers and ACH disrupted the need to move large amounts of physical currency and other hard assets, making the system more efficient and safer. Through technology, there is opportunity to transform how we think about transferring assets.

Throughout recent history, whether previous transformations involved industrialization, communications, or the internet, each of these advances had a profound and lasting impact on our society. While the future is unknown and unknowable, I expect we will look back at some point to consider the impact of blockchain, AI, and quantum computing and marvel at the transformation of everyday business processes. Time will tell, but the opportunities and possibilities that lie ahead may be profound.

Of course, you know better than most that bank regulators approach technology and periods of change with caution and skepticism, concerned about rapid growth, new business models, greater interconnectedness and interdependence, often focusing only on the risks. But risks may be offset or at least determined to be manageable when we recognize and consider the potentially extensive benefits of new technology.

Today, I’d like to address the Federal Reserve’s approach to thinking about technology and tools like blockchain in context of bank supervision, including recent developments, the cost of supervisory focus on “reputational risk,” and principles for a tailored regulatory framework that accommodates technology.

Reframing the Regulatory Mindset

Bank regulators work to promote safety and soundness in the financial system through regulation and supervisory practices. Our goal is not just a safe and sound banking system, but one that also serves its intended purpose of supporting consumers, businesses, and communities, and fostering economic growth. To accomplish this goal, regulators strive to strike a balance between managing risks that threaten safety and soundness, while also creating an environment that allows new technologies to take root and grow.

Innovation outside the banking system often complements the development and use of technology within the banking system, and often far outpaces that growth. As you’re all aware, many groundbreaking tech innovations have been pioneered by developers outside of the traditional banking system.

Developments in the Banking System

We are seeing a number of promising developments in the banking and financial system, and I’ll start with tokenization.

While progress on tokenization is moving ahead, it’s helpful to identify and understand the problem that it is intended to solve. One clear friction is in the transfer of asset ownership, which includes both completing the asset transfer—which may involve re-registering securities, or transferring physical assets—and coordinating the timing of the purchase and sale. Asset transfer frameworks are designed to minimize the risk of transaction failures, and have historically relied on escrow agents and manual processes. Tokenization has the potential to facilitate faster ownership transfer, mitigating some of these well-known risks and potentially lowering costs in the process.

Tokenized assets enable a transferor to pass title without changing a custodian or moving any physical security or asset. Many banks and international organizations have begun projects to develop this technology, but we have not yet seen broad adoption. It is possible that we could see a “tipping point” where the processes themselves are well-established, and legal frameworks have been updated to permit a wider range of activities relying on the new technology, and tokenized asset transfers become more of a market standard.

There are other potential advantages to tokenization, including expanding access to capital markets and facilitating near real-time payments. The speed and cost of wholesale payments, especially internationally, is a longstanding problem that tokenization could help to address. Banks of all sizes, including community banks, can benefit from efficiency gains that flow from asset tokenization. New technology and processes can open the door to direct, faster, and lower cost payments.

While tokenization may be part of the solution to a number of known frictions in the banking system, the blockchain technology that it relies upon has already changed how banks seek to engage with their customers. For example, while digital assets have been considered to be risky, many banks are improving their tech stacks and security infrastructure to provide digital asset custody services to a wider range of retail customers. Very few bankers, and even fewer regulators, anticipated that the market would accommodate this development even just a few years ago. Yet we’ve seen much progress and a growing appetite for traditional bank engagement in this space. We are also seeing positive signs in the evolution of the digital asset user experience, making digital assets more accessible and easier to use.

One recent development—Congress passing the GENIUS Act and the President signing it into law—has brought stablecoins to the forefront of many discussions. And they are now positioned to become a fixture in the financial system, with implications and opportunities for the traditional banking system, including the potential to disrupt traditional payment rails. Congress tasked the banking agencies with creating a regulatory framework for stablecoins, and we are working with our colleagues in the other agencies to move forward.

It is essential that banks and regulators are open to engaging in new technologies and departing from an overly cautious mindset. Regulators must understand new products and services and recognize the utility and necessity of embracing technology in the traditional financial sector.

So how do we accomplish this? Some of you may have had direct experience with regulators and the banking system, as you attempted to engage in this type of partnership with banks through the introduction of new technology and services. I am sure that many of you were not satisfied with these interactions. When you start from a world of possibility, where you move fast and break things to make rapid improvements, you may struggle with the complex and rigid regulatory constructs familiar to bankers and regulators. In this world, inertia can easily set in and pose resistance to anything not deemed within the realm of “traditional” banking activities.

Despite this past inertia, change is coming.

Bank regulators are taking important steps to create a framework for digital assets and the adoption of blockchain technology within the banking system. These steps will promote accessibility to banking products and services by removing supervisory impediments that have stood in the way of bank relationships. I am also encouraged by the promise of this technology, by its ability to solve problems and improve the efficiency of the traditional financial system.

To this point, I have noted several use cases that have already been adopted or are in development within the banking system, but I would also like to encourage the industry to engage with regulators to help us understand blockchain and its potential to solve other problems. What is the value proposition of any new product or approach? What problem is it intended to address? And how should regulators consider both the risks and benefits, so we can provide a path to allow its use within the banking system?

We have already seen some initial benefits of bank AI adoption, and I continue to be encouraged by the significant ongoing investments being made in AI and in machine learning. These technologies have the potential to transform how business is conducted, including the way we detect and prevent fraud, manage risk, and provide customer service. During a recent banking conference at the Fed, Sam Altman, the CEO of Open AI, joined me for a fireside chat on AI in the banking and financial sector.² One highlight from our discussion was the two-sided nature of how technology can impact banking transactions—just as AI can undermine customer verification methods designed to identify and mitigate fraud, AI tools can also be leveraged to detect and mitigate fraud.

I see a similar challenge with blockchain technologies. Some bankers have expressed concerns about new technologies posing a threat to traditional business models and practices. But the banking system is constantly evolving, and technology can change the banking system regardless of how banks and regulators choose to respond. We must choose whether to embrace the change and help shape a framework that will be reliable and durable—ensuring safety and soundness and incorporating the benefits of both efficiency and speed—or to stand still and allow new technology to bypass the traditional banking system altogether. From a regulator’s perspective, the choice is clear.

I am open to these discussions, and I look forward to learning more. Many of you have a great deal to share and have new ideas about the best regulatory approach to blockchain and digital assets. Let me start with a specific request on fraud: how can new technologies be leveraged to fight fraud? Fraud is a major challenge in the financial services sector, and if blockchain or other new tools could mitigate it, we should explore those use cases. If fraud can be addressed using new technology, we should make sure that the regulatory framework does not stand in the way. I see this as an exciting opportunity for collaboration between industry and the Fed.³

The promise of technology and advances like AI are already positioned to impact parts of the banking and financial system. Ideally, changes will occur with the willing embrace of regulators—allowing use cases to proliferate in a way that benefits the banking system. If this is not our approach, then we risk the banking system becoming less relevant to consumers, businesses, and the overall economy. As a result, the banks will play a diminished role in the financial system more broadly. Those who follow developments in bank regulation have hopefully recognized some positive steps that demonstrate our commitment to embrace change. I am committed to changing our culture and attitude toward the adoption and integration of technology and new products and services.

The Hidden Role of Reputational Risk

In late June, the Board announced that reputational risk would no longer be considered in our supervisory process.⁴ To implement this lasting change, we are updating guidance, examination manuals, handbooks, and other supervisory materials to ensure the durability of this approach, which is a critical step in addressing the problem of de-banking. I am also considering whether we need a regulatory change to provide greater transparency and certainty about this approach. It is not the role of examiners or policymakers to direct which customers or industries to serve or which products to offer. That decision lies solely within the purview of bank management, limited by the safety and soundness of the institution,, the legal activities of its customer, and risks, if any, to financial stability.

Over time, “reputational risk” emerged as a priority area that policymakers emphasized for examinations. Exams or reviews focused on reputational risk have often lacked a sufficient nexus to financial risk and safety and soundness considerations that are the appropriate focus of our supervisory activities.

Let me be clear. We must adopt an approach that does not penalize or prohibit a bank from banking a customer engaged in legal activity. This approach must allow and encourage banks to provide banking products and services to any legal business, without disfavoring any particular viewpoints, businesses, or industries.

The Importance of Outreach

The industry—whether traditional finance, community banking, or digital assets—should expect a constructive engagement with our supervisors when discussing strategies and approaches for innovation. As regulators, we must engage in a way that enables our supervisory teams to understand the technology or innovation under consideration and have an open-minded view about the benefits and possibilities of a new approach, while also understanding effective mitigation strategies to address any risks. Banks should be encouraged to explore new technology, to engage in discussions with their regulators about how they can be deployed, and what reasonable supervisory expectations should apply. In this context, a healthy dialogue and a commitment to learning ensures the bank and examiner relationship can be collaborative rather than antagonistic in tone.

Innovators, banks, and regulators must develop a constructive relationship, and this relies on a commitment to ongoing outreach. As I have demonstrated throughout my tenure as a regulator at both the state and federal levels, I am committed to outreach that enhances my understanding of industry preferences, challenges and better ways to engage with both developers and adopters. We should build an examination workforce that requires skills development and informed judgement to address evolving business preferences, practices and expectations. In a step toward doing so, last week, I announced that the Fed’s “novel supervision” activities would be reintegrated into our Reserve Bank examination staff. This will reestablish the role of the normal supervisory process in monitoring banks’ so-called “novel activities.”⁵

Our approach should consider allowing Federal Reserve staff to hold de minimus amounts of crypto or other types of digital assets so they can achieve a working understanding of the underlying functionality. While there are many resources available to learn about these financial products, and we will soon be establishing a framework for supervising issuers of these assets, there’s no replacement for experimenting and understanding how that ownership and transfer process flows.

I certainly wouldn’t trust someone to teach me to ski if they’d never put on skis, regardless of how many books and articles they have read, or even wrote, about it. We should consider whether limits on staff investment activities may be a barrier to recruiting and retaining examiners with the necessary expertise and for existing staff to better understand the technology.

Building a Tailored and Proportional Regulatory Framework

Going forward it will be necessary to continue to implement a tailored approach to these new technologies in our supervisory activities, an approach that balances the supervisory and regulatory expectations in a way that is commensurate with risk.

What would this look like in practice? It needs to include regulatory certainty, tailoring, safety and soundness, consumer protection, and maintaining America’s reputation for providing an open environment for innovation. Regulators should abide by these principles in developing this framework.

The first principle is essential. That is regulatory certainty. Justifying investing in new blockchain development specifically for the banking industry, or even repurposing existing blockchain technologies for this sector, requires significant investment. Why would you make that investment without a clear understanding about how regulators will evaluate new use cases in a highly regulated industry? Would you choose to partner with banks, knowing that this will bring regulatory scrutiny and uncertainty, or would you develop alternatives outside of the banking system? Your industry has already experienced significant frictions with bank regulators applying unclear standards, conflicting guidance, and inconsistent regulatory interpretations. We need a clear, strategic regulatory framework that will facilitate the adoption of new technology, recognizing that in some cases, it may be inadequate and inappropriate to apply existing regulatory guidance to address emerging tech.

Having clear and transparent rules is not effective if these rules are unnecessarily burdensome and restrictive. So, my second principle is that rules must be well-calibrated and tailored to address risks. Well-calibrated regulation promotes responsible innovation while also aligning incentives for long-term growth and stability. Tailoring rules and supervision requires regulators to approach each use case based on particular facts and circumstances, rather than applying expectations designed for an imaginary “worst-case” scenario that differs from the actual use case. We cannot adopt a one-size-fits-all approach. Regulators must recognize the unique features of these new assets and distinguish them from traditional financial instruments or banking products.

A third principle is that frameworks must be consistent with generally applicable rules and requirements. Customer-facing products must comply with consumer protection laws, including those prohibiting unfair, deceptive, or abusive acts or practices. We must think carefully about appropriate regulations to protect consumers and investors, maintain bank safety and soundness, and preserve the stability of the financial system. Any legal framework must also include appropriate Bank Secrecy Act and anti-money-laundering requirements, to fulfill the important policy objectives of these requirements.

Finally, we need to build a framework that allows the United States to continue to be the best place in the world to innovate. Failing to do so could jeopardize American competitiveness over the long run. Regulators have taken preliminary steps to support blockchain technology within the banking system, as well as to eliminate deterrents for banks to provide services to the digital asset industry. I am confident that with the benefit of ongoing outreach and education we will build a framework that is fair, efficient, and transparent.

Closing Thoughts

We stand at a crossroads: we can either seize the opportunity to shape the future or risk being left behind. By embracing innovation with a principled approach, we can define the course of history and fulfill our responsibility to promote the safety and soundness of the banking system and financial stability.

We are mindful of the potential risks and vulnerabilities that result from rapid transformation. We are cautious about the unintended consequences, and our mindset, and policies guide us toward minimizing risks. But we must pay equal attention to the benefits side of the equation. Innovation and regulation don’t need to be on opposite ends of the spectrum. In fact, they complement each other. A more modern, efficient, and effective financial system furthers key regulatory objectives—promoting safe and sound banking operation, financial stability, and economic growth.

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1. The views expressed here are my own and are not necessarily those of my colleagues on the Board of Governors of the Federal Reserve System or the Federal Open Market Committee. Return to text

2. Michelle W. Bowman, “Fireside Chat with OpenAI CEO Sam Altman,” conducted at the Integrated Review of the Capital Framework for Large Banks Conference, Washington, D.C., July 22, 2025. Return to text

3. See Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation, “Federal Bank Regulatory Agencies Seek Comment to Address payments and Check Fraud,” press release, June 16, 2025. Comments on the RFI are due on September 18, 2025. Return to text

4. Board of Governors of the Federal Reserve System, “Federal Reserve Board Announces That Reputational Risk Will No Longer Be a Component of Examination Programs in Its Supervision of Banks,” press release, June 23, 2025. Return to text

5. See Board of Governors of the Federal Reserve System, “Federal Reserve Board Announces That It Will Sunset Its Novel Supervision Program And Return to Monitoring Banks’ Novel Activities Through the Normal Supervisory Process,” press release, August 15, 2025. Return to text

Our Vancouver office with support from Amsterdam advised EverWind Terminals Canada on its C$50 million investment in state-of-the-art lower emission tugboats for the Strait of Canso in Nova Scotia. Our offices advised on all aspects of the project, including supporting infrastructure, financing and shipbuilding agreements.

One of the largest private sector investments in the Strait of Canso in the last 50 years, the new tugboats will replace the existing fleet and will result in a reduction of greenhouse gas emissions, lowering the environmental impact of marine operations in the Strait. The tugboats were built by Damen Group, a Dutch defense, shipbuilding and engineering company.

The purchase of the new tugboats will support EverWind’s Point Tupper project with the transportation of green hydrogen and ammonia.

The Norton Rose Fulbright team assisted with the purchase and financing of the vessels which involved structured credit insurance provider Atradius, the Netherlands-based export credit agency and Damen.