Key Points
- President Joe Biden will name Michael Barr as the Federal Reserve’s large bank supervisor, marking the administration’s second try at filling the position.
- During the Obama administration, Barr worked as an assistant Treasury secretary for financial institutions, where he helped draft the Dodd-Frank Act of 2010.
- On Friday, Biden said of Barr, “He recognises that this job is not a partisan one, but plays a fundamental role in overseeing our nation’s financial institutions.”
- Sarah Bloom Raskin, Biden’s original choice to serve as the Fed’s bank supervisor, withdrew her nomination last month after facing resistance from Democratic Sen. Joe Manchin.
Michael Barr, a former Treasury Department official, will be nominated by President Joe Biden to be the Federal Reserve’s top bank regulator.
Barr’s selection was predicted after CNBC reported earlier this week that he was the White House’s top candidate. It would make the primary financial law author, the Fed vice chair of supervision, the most potent bank regulator in the United States.
During the Obama administration, Barr worked as an assistant Treasury secretary for financial institutions, where he helped draught the Dodd-Frank Act of 2010. That law, which came after the financial crisis of 2008-2009, was one of the most comprehensive overhauls of financial regulation in US history.
The Consumer Financial Protection Bureau, also called CFPB, is the creation of Dodd-Frank and the Fed’s vice chair for supervision, among many other regulations, to protect the economy from repeat disasters.
“He was important in the passage of Dodd-Frank, ensuring that a future financial catastrophe would not cause severe economic hardship for working families,” Biden said in a statement released alongside the formal White House announcement on Friday morning.
“He recognises that this is not a partisan job but plays a key role in regulating our nation’s financial institutions to ensure that Americans are treated fairly and that our economy is stable,” Biden continued.
President Trump also emphasised that when the Senate previously confirmed Barr, he got bipartisan support from Democrats and Republicans.
That could be an oblique acknowledgement of the administration’s difficulty in getting some of its nominations for finance regulatory roles through the Senate, split 50-50.
The White House is betting that Raskin’s resignation at Manchin’s hands will persuade progressives — who might have preferred Raskin — to support a more centrist candidate.
Democrats are likely to demand that Barr reveal details of his previous work for financial technology companies such as Ripple Labs, a blockchain-based payments firm, to ensure that he is free of corporate interests.
The White House is betting that Raskin’s resignation at Manchin’s hands will persuade progressives — who might have preferred Raskin — to support a more centrist candidate.
Moderate Democrats, such as Ohio Senator Sherrod Brown, the head of the Senate Banking Committee, are seen as more solid allies for the Obama and Clinton administration veterans.
Based on his work establishing what many in the GOP consider unduly burdensome banking rules, a Republican aide told CNBC that Barr would earn many no votes from his party’s ranks.
As he is one of seven members of the Fed’s board of governors who vote at every central bank meeting, Barr would be a powerful voice on monetary policy.
Last month, the Federal Reserve began the first of what is expected to be a series of interest rate hikes aimed at taming wild inflation. The Labor Department announced on Tuesday that prices in the United States increased by 8.5% in the year ended in March, the fastest rate since 1981.
Barr is currently the dean of the University of Michigan’s public policy school, a position he took after serving in the Obama administration. He worked as a special assistant to Treasury Secretary Robert Rubin, deputy assistant secretary of the Treasury, and special advisor to President Bill Clinton during the Clinton administration.
