Factbox-Who are the contenders for the Fed’s key regulatory task? By Reuters

2/2
© . FILE PHOTO: Federal Reserve Bank of Atlanta President Raphael Bostic participates in a panel discussion at the American Economic Association/Allied Social Science Association (ASSA) 2019 meeting in Atlanta, Georgia, US, Jan. 4, 2019. REUTERS/Christop

2/2

By Pete Schroeder WASHINGTON () – With Sarah Bloom Raskin out of the running for the Federal Reserve’s main regulatory role last month, President Joe Biden’s administration is once again chasing a new candidate. Raskin failed to gain enough support from moderate Democrats to be confirmed. Notably, West Virginia senator Joe Manchin said he would not support her, citing concerns she would discourage banks from lending to oil and gas companies. The Fed Vice Chair for Oversight’s role is one of the most powerful banking regulators in the government, and the next official is likely to take on a sizable portfolio, including risks related to climate finance, fintechs and fair loans. These are the candidates likely to be in the mix, according to analysts and Washington insiders. MICHAEL BARR, FORMER TREASURY OFFICIAL Michael Barr, currently a professor at the University of Michigan Law School, was a central figure at the Treasury under President Barack Obama when Congress passed the Dodd-Frank financial reform bill of 2010. As deputy secretary for financial institutions, Barr helped shape the Wall Street overhaul and is now a leading candidate to be nominated for the role of the Fed, according to two sources familiar with the matter. Barr was previously in the mix for another banking regulatory position, heading the Office of the Comptroller of the Currency. But opposition from some progressives, who cited his work with a number of fintech companies after he left the government, helped him take it into consideration. Barr did not respond to a request for comment. RAPHAEL BOSTIC, ATLANTA FED PRESIDENT With his appointment as president of the Atlanta Fed in 2017, Bostic became the first black person to hold a regional office of Fed president. He has been outspoken about racial diversity and economic inequality, both of which are key policy priorities for the Biden administration. An economist by training, Bostic previously held positions at the US Federal Reserve in Washington, where he received credit for his work on community loan regulation, and at the US Department of Housing and Urban Development. However, Bostic represents a bit of an unknown when it comes to financial regulation, analysts say. Still, some banks were enthusiastic about Bostic for the role when his name was first mentioned last year, according to two industry executives. A Bostic spokesperson did not immediately comment. NELLIE LIANG, UNDER SECRETARY OF TREASURY Liang, a former Fed official who is now Deputy Secretary of the Treasury for domestic finance, played a key role in building the regulatory framework after the recession and financial crisis of 2007-2009. She spent decades at the Fed as an executive and eventually became the first director of the central bank’s Financial Stability Department. She left the Fed in 2017 to join the Brookings Institution think tank, where she criticized Republicans’ efforts to reduce capital and liquidity requirements for major banks, among other things. Liang was nominated for a seat on the Fed’s board of directors during the Trump administration, but she withdrew in 2019 after Republicans blocked her nomination over concerns she would be too hard on Wall Street. However, some progressives are unhappy that Liang hasn’t taken a tougher stance on cryptocurrencies, “so it’s unclear if she would be in any future conversation about this role,” Isaac Boltansky, policy director for brokerage BTIG, wrote in a note Monday. † A spokesperson for Liang did not immediately respond to a request for comment. MICHAEL HSU, OBSERVING CURRENCY CONTROL Hsu, currently acting currency manager, previously oversaw major banks at the Fed. In his current role, he has shifted democratic priorities, including the risk of climate change, and warned banks about “over-confidence” stemming from the COVID-19 pandemic. While he would be a good fit with the Fed’s oversight, Washington insiders said, it’s unclear whether his stance on climate financial risk would be agreeable to Manchin, a moderate who represents coal-producing West Virginia in the Senate. A spokeswoman for Hsu did not immediately respond to a request for comment. FORMER UNDER SECRETARY TO THE TREASURY MARY MILLER A new name launched Monday was Mary Miller, who worked at the Treasury from 2010 to 2014. She most recently served as the interim senior vice president for finance and administration at Johns Hopkins University. During her tenure at the Treasury, Miller was responsible for treasury debt management, fiscal operations and recovery from the financial crisis. She was instrumental in the implementation of the Dodd-Frank Financial Reform Act of 2010, helping agencies write complex regulations such as the “Volcker Rule” and the creation of the new Financial Stability Oversight Council. Miller was not immediately available for comment. RICHARD CORDRAY, FORMER HEAD OF THE OFFICE FOR CONSUMERS FINANCIAL PROTECTION (CFPB) Cordray, a former Ohio Attorney General, was the first director of the CFPB. Under his leadership, the agency took an aggressive stance in pursuit of abusive mortgage and payday lenders, receiving praise from progressives and criticism from Republicans who said he was breaking the agency’s legal mandate. After leaving the office, Cordray ran unsuccessfully for the governor of Ohio. He currently heads the federal student aid programs of the Department of Education. Cordray was in the running for the supervision post late last year, reported. Cordray did not respond to a request for comment.

Leave a comment