Federal Reserve's vice chair for supervision, Michael Barr, set to step down

Investing.com -- The Federal Reserve's Vice Chair for Supervision, Michael Barr, is planning to step down from his role. The US central bank announced on Monday that Barr will leave his position on February 28, 2025, unless a successor is confirmed earlier. However, Barr will continue to serve as a member of the Fed's Board of Governors.

The Vice Chair for Supervision role was created after the Global Financial Crisis to enhance responsibility, transparency, and accountability for the Federal Reserve's supervision and regulation of the financial system. Barr expressed concerns that any dispute over this position could distract from the mission of the central bank.

Barr's departure could impact the future of a landmark proposal by US regulators. This proposal aims to compel the country's largest lenders to hold significantly more capital to buffer against losses. Barr has been instrumental in the negotiations for this plan, which is designed to prevent future bank failures and systemic financial crises.

Michael Barr has served as the vice chair for supervision since July 19, 2022. His departure is seen as positive by some as he is known as an advocate of stronger industry regulations and capital rules. Barr's resignation could potentially avoid a protracted legal battle, as there have been suggestions that President Trump was considering firing him.

The Federal Reserve Board confirmed that no major rulemakings will be taken up until a successor for the vice chair for supervision is confirmed. As vice chair for supervision, Barr supervised the regulation of financial firms under the Board's jurisdiction and collaborated with other bank regulators. This ensured the banking system remained a source of strength, even during stresses in early 2023.

Before his appointment, Barr held multiple positions at the University of Michigan, including serving as the Dean of the Gerald R. Ford (NYSE:F ) School of Public Policy, and as a professor of law. He also served in the U.S. Department of the Treasury in senior policy roles and clerked for Justice David H. Souter on the U.S. Supreme Court. He is a graduate of Yale University, Oxford University, and Yale Law School.

In his letter of resignation to President Joe Biden, Barr expressed his gratitude for the opportunity to serve as the Federal Reserve Board's vice chair for supervision. He also thanked Chair Powell, the other governors of the Federal Reserve Board, the presidents of the Federal Reserve banks, and the dedicated Federal Reserve employees for their commitment to protecting the American economy and serving the American people.

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Source: Investing.com