Michael Barr will step down from his role as the Federal Reserve’s vice chair for supervision by Feb. 28, or sooner if President-elect Donald J. Trump appoints a successor, the Fed said on Monday.
Mr. Barr will continue to serve on the central bank’s Board of Governors. “The Board does not intend to take up any major rulemakings until a vice chair for supervision successor is confirmed,” the central bank said.
As vice chair for supervision, Mr. Barr oversaw an attempt to rewrite financial rules that would have increased the amount of easy-access money that banks must have at the ready, potentially eating into their profitability.
The overhaul would have required the largest banks to increase their cushion of capital — cash and other readily available assets that could be used to absorb losses in times of trouble.
The proposal — and Mr. Barr — immediately came under attack from a wide range of groups, including the banking industry, lawmakers and even some of his colleagues at the Fed. Two of the Fed’s seven governors, both Trump appointees, voted against the rules, in a sign of discord at the consensus-oriented institution.
Mr. Barr ultimately watered down the proposal after acknowledging the blowback.
“Life gives you ample opportunity to learn and relearn the lesson of humility,” Mr. Barr said at event in September.
While Mr. Trump has not announced any plans to try and replace Mr. Barr, the president-elect has made clear he plans to take an industry-friendly stance toward banks, echoing his administration’s approach during his first term. Mr. Trump’s vice chair of supervision, Randal K. Quarles, worked to loosen bank supervision during his tenure.
Mr. Barr nodded at the potential for tension in a statement on Monday.
“The position of vice chair for supervision was created after the Global Financial Crisis to create greater responsibility, transparency, and accountability for the Federal Reserve’s supervision and regulation of the financial system,” he said. “The risk of a dispute over the position could be a distraction from our mission. In the current environment, I’ve determined that I would be more effective in serving the American people from my role as governor.”
This is a developing story. Check back for updates.
