Fed's Barr Says Regulatory Easing Risks Undermining Bank Safety

Federal Reserve Governor Michael Barr warned on June 6, 2026 that recent deregulatory steps by US agencies will weaken bank oversight and heighten financial stability risks. In prepared remarks, he said looser capital and liquidity rules “considerably weaken bank regulation and supervision” and could sow future economic harm. Barr, who stepped down as vice chair for supervision earlier to avoid a clash with President Donald Trump, criticized changes enacted under his successor, Michelle Bowman. Those include easing capital buffer requirements for large banks and narrowing supervisory scope. He cautioned that vulnerabilities from deregulation may not be visible now but will build over years. “With solid capital and stable funding sources, both individual banks and the banking system as a whole can absorb a wide range of shocks,” Barr said, urging watchdogs to act before risks materialize. The remarks highlight a rift at the Fed over the pace of Wall Street rule relaxations.