Federal Reserve Vice Chair for Supervision Michael Barr proposed significant changes to liquidity regulations for large U.S. banks, aimed at bolstering their resilience against future financial shocks.
While speaking at the U.S. Treasury Market Conference on Sept. 26, Barr outlined several proposed enhancements meant to ensure banks can withstand stress scenarios similar to those witnessed during a series of abrupt bank failures in 2023, which began with the collapse of Silicon Valley Bank.
“To address the lessons about liquidity learned in the spring of 2023, we are exploring targeted adjustments to our current liquidity framework,” Barr said.
While financial institutions have already taken steps to strengthen their liquidity resilience, the regulatory adjustments under consideration by the Fed aim to further ensure that large banks adopt stronger liquidity risk-management practices going forward, the senior Fed official added….