Fed’s Barr Says Regulatory Relief Boosted Big-Bank Profits, Not Lending

Following the 2008 global financial crisis, the United States strengthened banks’ capacity to absorb losses through capital, liquidity and stress-testing rules. Federal Reserve Governor and former Vice Chair for Supervision Michael Barr said recent regulatory easing favors large banks that hold vast amounts of assets. Community banks and the real economy have not received a corresponding increase in credit, while safeguards against the next crisis have been weakened.

At the Community Development Bankers Association’s annual forum on June 3, 2026, Barr said reforms had provided eight global systemically important banks with $65 billion in capital relief without increasing lending. Senior executive compensation as a share of revenue rose 18% from a year earlier, while share buybacks increased 66%. He warned that lowering capital requirements while restricting supervisory discretion could increase the risk of financial turmoil over the long term.