Michael S Barr: Making the financial system safer and fairer

Speech by Mr Michael S Barr, Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, at the Brookings Institution, Washington DC, 7 September 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Thank you, David, and thank you to the Brookings Institution for the invitation to speak to you today. On July 19, I had the honor of being sworn in as the Vice Chair for Supervision of the Board of Governors of the Federal Reserve System. This job was created after the Global Financial Crisis to lead the Fed's work overseeing the safety and soundness of banks and in support of its financial stability mandate. In the 12 years since then, great progress has been made in strengthening the banking system, and in strengthening oversight. I look forward to building on that work by helping to make the financial system safer and fairer, in support of an economy that serves the needs of households and businesses.

On behalf of those who may wonder what "building on that work" means, I will speak about some of my near-term goals and how I will approach achieving them. Starting with that word "building," which to me means more than just "maintaining." Success in financial regulation and supervision does not mean standing still because finance does not stand still. The regulatory and supervisory framework adopted after the crisis recognizes that innovation and change are constant in finance, that our understanding of existing and emerging risks can and should deepen over time, and that regulation and supervision must evolve to be effective. Many issues at the forefront of banking regulation today were not prominent five years ago, and some of them scarcely even existed. "Building" means staying ahead of changes, evaluating how banks are managing risks, and making the financial system safer and fairer for households and businesses.