The Federal Reserve announced on Monday that Michael Barr will resign from his position as vice chair for supervision while remaining a governor. In a letter addressed to President Joe Biden, Barr expressed his intention to step down as the banking regulator, with his resignation effective February 28 or sooner if a successor is in place.
Since July 2022, Barr has been at the helm of supervising the regulation of financial institutions within the Fed's jurisdiction. Barr stated, 'The position of vice chair for supervision was created post-Global Financial Crisis to enhance responsibility, transparency, and accountability regarding the Fed's oversight of the financial system.' He warned that the potential for conflict over his position may detract from the Fed's mission.
Last month, it was reported that Barr sought legal counsel to evaluate his options amid concerns that President-elect Donald Trump might attempt to remove him from his role. Trump is set to assume the presidency on January 20. As for the Fed's stance, they mentioned on Monday that there are no plans to engage in any significant regulatory changes until a new vice chair for supervision is appointed.
Senator Tim Scott commented on the situation, stating, 'From his supervisory failures during the spring 2023 bank collapses to the flawed Basel III Endgame proposal – Michael Barr has not fulfilled his obligations.' He further expressed readiness to collaborate with Trump to secure capable financial regulators leading the institution..