Barr, Biden’s pick for Fed regulation role, makes his case before Senate -Breaking
By Pete Schroeder
WASHINGTON (Reuters] – On Thursday, Michael Barr, second Democratic President Joe Biden nominee to the Federal Reserve Wall Street Officer, addressed the Senate. His argument for why he should assume the extensive regulatory portfolio of the central bank.
Barr is a former Treasury Department official who was under President Barack Obama. He looks well placed to win Senate confirmation, having received early support from progressive Democrats and key moderates in this evenly divided chamber.
Barr stated that he will work hard to make sure the financial system operates in a fair and resilient manner, as well as allowing for new ideas with clear rules.
He’s in a better position than Sarah Bloom Raskin (Biden’s first nominee to Fed supervision vice-chair), who withdrew the nomination when Joe Manchin, Democrat, refused to support her.
Barr, currently a law prof, already has the support of moderate Democrats including Manchin. Progressives are eager to increase scrutiny of Wall Street, following what they claim was Republican regulatory ease. Barr, a Treasury professor, was central to the creation of Dodd-Frank’s 2010 financial reform law. This legislation established several safeguards after the 2008 financial crisis.
Isaac Boltansky from brokerage BTIG said, “This hearing is going to be far simpler, simpler, and faster than we saw last year,” adding that Barr should have been confirmed by August.
However, he was met with some doubts by Republicans at the beginning of the hearing. The top Republican, Senator Pat Toomey said Barr has an “impressive history” but had his doubts. Barr was opposed to a bank deregulation bill for 2018, which had been supported by some Democrats, and he has discussed the long-term financial and economic risks of climate change.
Barr will take over the Fed board’s vacant position and would likely pursue an extensive agenda. This could include reviewing rules that Randal Quarles had relaxed and dealing with climate change risks, fintechs and cryptos.
Raskin withdrew the nomination of Manchin, a coal-producing West Virginian, because she had called on financial regulators and others to be more aggressive in combating climate change risk. This effectively ended her nomination.
Manchin said Tuesday that Barr would be his support. Elizabeth Warren, an outspoken critic of big banks, stated in April that the party’s progressive wings supported Barr.
Barr was reelected by the progressives after he was rejected last year to be his comptroller, another high-ranking regulatory job. The progressives wanted to pick someone more liberal, pointing out Barr’s work in the private and his opposition to Dodd-Frank regulations as negative marks.
They are eager to fill the key positions, however, having rejected their preferred candidates (including Saule Omarova and Raskin, an ex-Biden choice for Comptroller of The Currency) amid opposition from moderate Democrats.
For example, the Fed has had to slow down its regulatory efforts due to the absence of a full-time supervisor chief.
Barr will be joining 18 Fed policymakers to set the direction of monetary policy in the fight against 40-year high inflation if he is confirmed. Barr’s views on monetary policy are not well known, but he noted in his testimony that he would be “strongly committed” to bringing down inflation.