(Reuters) – The U.S. Federal Reserve’s regulatory chief said on Thursday the central bank is exploring adjustments to bank capital requirements, noting the inability of supervisors to predict unexpected shocks would argue for higher overall capital levels.
In a speech at the American Enterprise Institute, Fed Vice Chair of Supervision Michael Barr also said the central bank is exploring if adjustments to the leverage ratio, one element of the Fed’s capital requirements, would be appropriate.
“History shows the deep costs to society when bank capital is inadequate, and thus how urgent it is for the Federal Reserve to get capital regulation right,” said Barr.
(Reporting by Hannah Lang in Washington; Editing by Chris Reese)