Investing.com -- The Federal Reserve's highest-ranking regulatory official has issued a warning against the potential softening of bank regulations and oversight. The official expressed concerns that such a move could leave financial institutions susceptible to unexpected shocks.
Michael, the Fed's Vice Chair for Supervision, who is scheduled to step down from his regulatory position at the end of February, sounded the alarm about any significant reduction in existing banking rules and supervision. He advocated for regulatory authorities to finalize international capital standards.
The Vice Chair underscored the importance of maintaining strong bank rules and oversight mechanisms to safeguard financial firms from unforeseen shocks that could potentially destabilize the financial system. His comments come at a critical time, as he prepares to leave his regulatory role at the end of the month.
Michael's call to action is for watchdogs to complete the process of setting international capital standards. These standards are crucial for ensuring that banks have sufficient capital to absorb losses and continue operations during times of financial stress.
His warning and recommendations highlight the ongoing need for robust regulatory measures in the banking sector, to protect both the institutions themselves and the broader financial system.
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