House, Senate lawmakers call on Fed to fill vice chair for supervision role
More than two dozen lawmakers are urging the Federal Reserve Board to fill quickly the vice chair for supervision position that is now vacant.
… The appointment of a new vice chair for supervision will be done as the White House asserts more control over Fed operations. A recent executive order reining in independent regulatory agencies applies to the Fed’s supervision and regulation of financial institutions. It does not affect Fed monetary policy decisions. The order threatens the Fed’s longstanding latitude, said Michael Pedroni, a former senior Treasury Department official.
“The risk is that the EO scoping in the Fed’s supervision is a first step at chipping away at the Fed’s overall independence,” said Pedroni, founder and CEO of Highland Global Advisors.
“That is unfortunate because Fed independence has been a key pillar of our financial system.”
Barr will remain a Fed governor. His replacement is expected to be another governor, such as Michelle W. Bowman or Christopher J. Waller. His successor will also vote on monetary policy, which could give Trump some leverage on his choice for the supervision appointment.
“The White House may seek some indication from them that they will be more doveish on interest-rate policy if they get that role,” Pedroni said.