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Earlier today the Federal Reserve Board\u2019s vice-chair of supervision, Michael Barr, unveiled<\/a> sweeping changes to a proposal that would change the way banks protect their customers in the event of a meltdown, cutting the proposed increase in capital they must keep on hand by half.<\/p>\n Bank lobbying groups immediately responded<\/a> with cautious optimism, though they have stated the industry would prefer no increase in capital requirements at all. But not everyone is pleased.<\/p>\n On Tuesday, progressive Senator Elizabeth Warren (D-MA) repeated her claim from three years ago that \u201cFed Chair Powell is a dangerous man whose actions make our banking system less safe.\u201d<\/p>\n \u201cThe revised bank capital standards are a Wall Street giveaway \u2026 increasing the risk of a future financial crisis and keeping taxpayers on the hook for bailouts,\u201d said Warren in a statement. \u201cAfter years of needless delay, rather than bolster the security of the financial system, the Fed caved to the lobbying of big bank executives.\u201d<\/p>\n The initial proposal unveiled last year would have increased capital requirements of banks larger than $250 million by 19%\u2014money that would otherwise be available to invest in other projects or loaned out to businesses and individuals. The new proposal would increase requirement by only nine percent.<\/p>\n Warren initially called<\/a> Powell dangerous in 2021 in the build up to his eventual renomination as the chair of the Federal Reserve, warning against what she considers a lax history of overseeing U.S. banks. In August she released a statement<\/a> urging the Federal Reserve to finalize the initial so-called Basel III endgame, which reflects measures proposed by regulators to forestall a repeat of the 2008 financial crisis.<\/p>\n The changes Barr proposed today now need to be opened for comment, and could face another round of modifications before they\u2019re implemented.<\/p>\n<\/div>\n<\/div>\n\n