Fed Official Warns Against Weakening Bank Rules and Oversight
WASHINGTON – The Federal Reserve's top regulatory official cautioned against a weakening of bank rules and oversight that could leave firms vulnerable to unforeseen shocks.
Michael Barr, Vice Chair for Supervision, is stepping down from his regulatory post at the end of February. He urged watchdogs to complete international capital standards and warned against any significant weakening of existing bank rules and supervision.
"We should not underestimate the importance of having the strongest possible financial system," Barr said. "That may sometimes mean having higher regulatory standards than some of our international peers."
The remarks come amid a push by some lawmakers and industry groups to roll back regulations implemented in the wake of the 2008 financial crisis. Barr argued that such moves could increase risk exposure and undermine the financial system's resilience.
"We need to be mindful of the risks that can emerge from the shadows of the financial system," Barr said. "We need to ensure that our regulatory and supervisory framework is robust enough to identify and address those risks."