Fed Considers Adjustments to Liquidity Rules for Banks Handling Crypto Deposits
CryptoNewsTerminal Staff20 May, 2024
Fed Considers Adjustments to Liquidity Rules for Banks Handling Crypto Deposits
Federal Reserve Reviewing Liquidity Requirements for Banks The US Federal Reserve is considering adjustments to existing liquidity rules for large banks, Reuters reports. These changes aim to ensure that banks have sufficient liquidity to withstand unexpected losses or deposit outflows during periods of stress. SVB Failure Prompts Fed Review The Fed's review was triggered by the rapid deposit outflows that contributed to the failure of Silicon Valley Bank. Barr, a Fed official, noted that the Fed may require large banks to hold enough liquidity to cover even uninsured deposits. Scrutiny of Crypto-Related Deposits Reuters indicates that regulators are also examining how to treat deposits linked to venture capital (VC) and cryptocurrency companies, which could pose elevated risks of outflows during times of stress. The Fed is "looking at" these types of deposits to determine appropriate regulatory measures.
