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US Fed's top banking regulator says he will step down early / Photo: © AFP/File
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US Fed's top banking regulator says he will step down early
The US Federal Reserve's top banking regulator announced his early resignation Monday, avoiding a confrontation with President-elect Donald Trump who can now pick his replacement.
Michael Barr, the Fed's vice chair for banking supervision, said in a statement that he will step down from his management role by February 28 at the latest -- around 18 months before his term was set to expire in July, 2026.
Barr, who was nominated by outgoing Democratic President Joe Biden, said he will remain as a Federal Reserve governor, a role that gives him a permanent vote on the US central bank's powerful interest rate-setting committee.
That decision means Trump will have to pick his replacement from among the Fed's current seven-strong board of governors -- unless one of them chooses to voluntarily resign before their term expires.
"The risk of a dispute over the position could be a distraction from our mission," Barr wrote in a letter to Biden announcing his resignation, which the Fed shared with reporters.
"In the current environment, I've determined that I would be more effective in serving the American people from my role as governor," he added.
Barr is only the second person to serve as Fed vice chair for supervision, a role created in the aftermath of the Global Financial Crisis.
His resignation paves the way for Trump to replace him with someone more in tune with his own views on banking regulation.
His successor must be officially nominated by Trump after he takes office on January 20, and then confirmed by the Republican-controlled US Senate. Whoever fills the post will likely favor a lighter touch when it comes to banking regulation and supervision.
Barr's biggest public critic from within the Fed has been Michelle Bowman, a Trump-nominated governor who has consistently opposed attempts at enacting tougher banking regulation.
US banking stocks rose after Barr's announcement, with the SPDR S&P Bank ETF, which tracks popular banking stocks, up by around 1.8 percent at 11:30 am (1630 GMT).
K. Berger--BTZ
