Fed's Barr Hints at Reforms in Capital, Merger and Climate Policies

Source: American Banker

The Federal Reserve's vice chair for supervision laid out an expansive vision for his approach to financial regulation in the Biden era on Wednesday, suggesting that the central bank would pursue significant reforms of banks' capital rules, climate-risk assessments and bank-merger reviews.

In his first public remarks since being sworn in in July, Michael Barr told a Brookings Institution audience that he would seek to make the U.S. financial system "safer and fairer, in support of an economy that serves the needs of households and businesses."

Regulators must be vigilant and maintain "an active and never-ending effort" to police the financial system, Barr said in prepared remarks.

"Success in financial regulation and supervision does not mean standing still," Barr said, "because finance does not stand still. The regulatory and supervisory framework adopted after the crisis recognizes that innovation and change are constant in finance, that our understanding of existing and emerging risks can and should deepen over time, and that regulation and supervision must evolve to be effective."