Fed Governor Barr opposes lowering bank liquidity rules
Fed Governor Michael Barr warned that lowering bank liquidity rules to shrink the balance sheet risks stability. He said 2023 stresses show rules should rise.
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Federal Reserve Governor Michael Barr warned that reducing bank liquidity requirements to shrink the central bank's $6.7 trillion balance sheet could threaten financial stability. The comments address proposals to limit the United States central bank's footprint by easing rules that currently mandate high cash reserves. Barr argued that maintaining robust bank resilience is more critical for market functioning than achieving a specific balance sheet size.
