Federal Reserve Vice Chair for Supervision Michelle Bowman has highlighted a significant shift in corporate lending from regulated banks to nonbank lenders, attributing this trend to stringent banking regulations. Speaking at the Hoover Institution on May 8, Bowman noted that banks' share of the corporate lending market has dropped from 48% in 2015 to 29% in 2025, with private credit funds and other nonbank entities filling the gap. Bowman pointed to Basel III capital requirements as a key factor, arguing that these rules make direct corporate loans more costly for banks, thus incentivizing lending through less regulated private funds. She proposed recalibrating these requirements to better align with the actual risk of different loan types, aiming to prevent risk migration to less supervised sectors. Bowman's remarks underscore the need for regulatory adjustments to maintain financial stability while ensuring effective oversight.