The Federal Reserve’s top bank cop said the regulator should weigh how its liquidity rules affects lenders during times of volatility and address weaknesses in the framework.
Michelle Bowman said Tuesday that although the components of liquidity requirements should work together to mitigate the risk of a bank failure, the framework does not consider how lenders actually perform during stress.
Michelle Bowman, vice chair for supervision at the US Federal Reserve
Photographer: Al Drago/Bloomberg
“We need to know whether these tools deliver the promised resilience or whether we have created a framework that looks impressive on paper but fails to capture the vulnerabilities that emerge in times of stress,” Bowman said in ...
