Fed Governor Michael Barr criticized recent rollbacks easing limits on bank
lending, saying proposals have substantially weakened bank oversight and that
vulnerabilities from looser rules may not be visible now but could accumulate
over several years and cause serious economic damage. He said Trump-era
officials loosened capital requirements, narrowed the regulatory perimeter and
facilitated competition between traditional banks and private-credit firms. Barr
warned that weaker capital, liquidity and supervisory standards would raise the
risk of bank stress; while banks need room to support economic innovation,
history shows profit-driven innovation can create without adequate safeguards
excessive risk that, if realized, threatens firms, households and the broader
economy.
