WASHINGTON (Reuters) - Federal Reserve Governor Michelle Bowman told lawmakers on Thursday that she would overhaul how the U.S. central bank monitors large banks, encourage innovation, and pursue "pragmatic" rules for the financial system.

Testifying before the U.S. Senate Banking Committee, Bowman said the current regulatory system should be streamlined. If confirmed to oversee bank regulation at the Fed, Bowman said she would work to ensure regulators prioritize simpler rules for smaller banks, and bank supervisors provide clear guidelines for the institutions they monitor.

"The U.S. regulatory framework has grown expansively to become overly complicated and redundant, with conflicting and overlapping requirements. This growth has imposed unnecessary and significant costs on banks and their customers," she said in her prepared testimony.

Bowman was nominated by President Donald Trump to take over as the Fed's vice chair for supervision, its top regulatory post. A former community banker, she has served on the Fed's Board of Governors since 2018.

She consistently criticized efforts by the Biden administration to impose stricter rules on the financial sector. Instead, she has called for a lighter touch across a range of regulatory tools deployed by the Fed, which is charged with monitoring some of the country's largest lenders.

She received quick support from Senator Tim Scott, the Republican chairing the panel, who said she would bring "accountability and transparency" to the central bank. But Senator Elizabeth Warren, the panel's top Democrat, criticized Bowman's call for less onerous rules and oversight, particularly after a tumultuous week in financial markets tied to Trump's import tariffs on U.S. trading partners.

"President Trump is fanning the flames of disaster with his mismanagement of the nation's economy," Warren said. "Instead of showing up with the fire department, Governor Bowman brings a can of gasoline."