Michelle Bowman called for a rethinking of bank liquidity frameworks, suggesting that current rules may not fully reflect banks’ ability to withstand financial crises without deeper reforms.
Federal Reserve Governor Michelle Bowman urged a reassessment of bank liquidity rules, particularly the discount window, emphasizing that without comprehensive reforms, banks will continue stockpiling high-quality liquid assets, tightening credit, and increasing reserve demand. She highlighted the need for practical evaluations of bank resilience during financial stress, rather than focusing solely on compliance.