Barr Sees Big Bank Deregulation as Threat to Community Banks

Federal Reserve Governor Michael Barr views Trump-era moves to loosen rules and relax supervision over Wall Street lenders as a mistake, saying that recent capital proposals threaten protections for smaller banks.

“As community bankers well know, it was not community banks that fueled the 2008 financial crisis — it was the largest, most complex firms whose excessive risk-taking nearly brought down the system. In the years since, strong reforms — higher capital, tougher liquidity requirements, and rigorous stress testing — have helped to safeguard our economy,” Barr said Wednesday in prepared remarks for a community banking research conference at the St. Louis Fed.