U.S. Fed's New Supervision Chief Barr To Lay Out Vision For Wall Street Oversight
The U.S. Federal Reserve's new regulatory chief Michael Barr will on Wednesday outline his plan for overseeing Wall Street banks and reviewing regulations, in his first public remarks since joining the central bank in July.
Nominated by Democratic President Joe Biden as the Fed's Vice Chair of Supervision, Barr is expected to take a much more aggressive stance on Wall Street than his Republican predecessor Randal Quarles. As a former senior Treasury Department official, Barr helped craft the 2010 Dodd-Frank law that created the Fed Supervision role and imposed a host of new rules on lenders in the wake of the 2007-09 financial crisis.
Barr is due to speak at 2:00 p.m. EDT (1800 GMT) at the Brookings Institution. The Washington think tank said his remarks will focus on making the financial system "safer and fairer."
Barr's to-do list includes potentially reviewing bank capital and trading rules that were relaxed by Quarles, overhauling how the Fed handles large bank mergers, and stepping up scrutiny of risks posed by climate change, cryptocurrencies and fintech firms, according to analysts and policy experts.
With Barr in place, all the major financial regulatory agencies are now filled with Biden picks, meaning other joint reform efforts, such as overhauling fair lending rules and the U.S. Treasury market structure, can also be accelerated.
"It is just so important to have this position filled with a Biden appointee," said Todd Phillips, director of financial regulation at the Center for American Progress, a liberal think tank. "Having Barr allows the Biden bank regulatory agenda to kick into high gear."
Barr's role gives him extensive powers to supervise the country's largest lenders, including by setting their capital levels via a number of rules and annual "stress tests" of their balance sheets. Some Democratic critics say the annual stress tests have become too easy and the industry is keen to glean Barr's views on whether those should be stricter.
Banks are also anxious to get Barr's view on Basel III global capital requirements, and the "supplementary leverage ratio," which banks say has limited their ability to provide liquidity to the Treasury markets.
Barr is also expected to tackle oversight of large regional banks, which have dramatically grown following several high-profile mergers in recent years. He could suggest a number of ways to ramp up safeguards for such lenders, including additional capital requirements, said analysts.
"This first speech should provide valuable insight into his actual priorities and the agenda for his tenure," said Isaac Boltansky, director of policy research for brokerage BTIG.
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