MNI BRIEF: Fed's Barr Aims For Broad Consensus On Capital Plan

Federal Reserve Vice Chair for Supervision Michael Barr said Friday he expects broad and material changes to the Basel III endgame proposal and will be aiming for a broad consensus among officials on any capital plan going forward. He said he doesn't see liquidity pressures in the banking sector currently.

"I am working very closely with Chair Powell and other members of our Federal Reserve Board in trying to reach a broad consensus," he said at an event at the University of Michigan Law School, floating adjustments to operational and credit risk criteria. "Today we're not seeing the kind of stress that we saw last March. The banking system overall is quite sound and resilient, and we're not seeing liquidity pressures in the system," Barr said, adding that banks have made arrangements to borrow from the Fed in case of an emergency. (See: MNI INTERVIEW: US Regulators Need More Oversight - IMF’s Adrian)

Since March las year many banks have moved to make sure they have in place legal agreements with the discount window and the Federal Reserve banks, he said. "We have about 5,000 banks and credit unions in the country that have legal agreements now with the Federal Reserve. About 3,000 of those institutions have pre-pledged collateral to the discount window, pledging to the discount window increased by about a trillion [dollars] since March 2023. So there's about 3 trillion dollars of collateral pledged at the discount window now."