Federal Reserve Governor Michael Barr urged policymakers to avoid shrinking the Fed’s balance sheet by easing bank liquidity requirements. He warned such changes could weaken financial resilience, disrupt money market functioning, and raise the chance that banks would need emergency central bank support during stress. Barr pointed to the 2023 banking turmoil as evidence regulators should strengthen, not loosen, liquidity buffers. His remarks arrive as debate intensifies over a possible future Fed direction under Kevin Warsh, who favors a smaller balance sheet and argues it could create more space to cut rates.
India’s currency in circulation hit a record ₹42.3 trillion in April after a sharp early-month jump of over ₹610 billion. Economists link the rise to strong rural cash demand, GST-related relief, and election spending, alongside inflation pressures. If the surge continues, it could tighten banking liquidity and push the RBI to recalibrate how it manages surplus funds.
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