Fed’s vice chair Michael Barr: The collapse of FTX occurred outside the banking system, a focus of oversight

11/15 03:16

According to Fortune, the top U.S. banking regulator at the Federal Reserve is urging Congress to pass legislation that would impose regulation on crypto currencies in the wake of the swift collapse last week of FTX, a leading crypto exchange. Michael Barr, the Fed’s vice chair for supervision, said in prepared testimony released Monday that “recent events in crypto … have highlighted the risks to investors and consumers associated with new and novel asset classes and activities when not accompanied by strong guardrails.” Barr, who took office in July, is scheduled to testify before Congress Tuesday for the first time as vice chair. The collapse of FTX occurred outside the banking system, Barr noted, a focus of his oversight. “Recent events remind us of the potential for systemic risk if interlinkages develop between the crypto system that exists today and the traditional financial system,” he said. Regarding the banking system overall, most large banks have healthy levels of cash reserves, Barr said, beyond even what is required by regulation.

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