Biden taps Michael Barr for Fed’s bank regulation position

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Biden taps Michael Barr for Fed's bank regulation position

Friday’s announcement by President Joe Biden was that he would nominate Michael Barr (dean of the University of Michigan’s public policy school) to serve as the Federal Reserve’s vice-chairman of supervision.

Barr was selected after Sarah Bloom Raskin, Mr. Biden’s first choice to be Fed chair, withdrew his nomination a month ago amid opposition from Republicans and one Democrat, Senator Joe Manchin of West Virginia. Critics of Raskin had suggested that she would use the Fed’s regulatory authority on climate change to discourage banks from lending money to energy companies.

Barr was the exception to the rule. Mr. Biden, however, noted the importance of politics in Friday’s statement that the Senate had cleared his nominee on a bipartisan basis.

Mr. Biden stated that Michael brings the experience and expertise necessary to fill this critical position at a crucial time in the country’s economy and for families across the country.

According to the Democratic president, Barr has “spent his career protecting consumers and, during his time at Treasury, played a crucial role in the creation of both the Consumer Financial Protection Bureau and the position for which he is being nominated.”

Barr is the dean of Michigan’s Gerald R. Ford School of Public Policy. He was the assistant Treasury secretary for the financial institution during the Obama administration and helped design the Dodd-Frank regulations in 2010.

A Rhodes scholar, Barr clerked for Justice David Souter at the Supreme Court. He also served in the Clinton administration at the White House and the Treasury Department.

Some liberal critics blocked Barr’s bid to be the Biden administration’s currency comptroller. This position is responsible for overseeing the regulation of national banks. These critics looked with suspicion at Barr’s participation on the advisory boards for the financial companies Lending Club, Ripple Labs. They claimed that Barr had contributed to the dilution of proposals for tighter bank regulations during Obama’s administration.

Ohio Senator Sherrod Brown, Democratic Chairman of the Banking Committee, expressed full support for Barr.

Brown stated that Michael Barr understood the importance of this role during this crucial time in our economic recovery. “I urge my Republican colleagues to stop using personal attacks and demagoguery and put Americans and their pockets first.”

Barr is praised by many others and said that he seems well-suited to the Fed position.

David Dworkin is the president of the National Housing Conference. He suggested that Barr’s knowledge of Wall Street allows him to combine “centrist expertise with progressive policy views” to be confirmed by a divided Senate.

Barr will join the Fed during a particularly challenging and high-risk time for the central bank and the economy.

To lower persistently high inflation, the Fed will raise interest rates aggressively over the next months. It will be extremely difficult for Jerome Powell, Fed Chair, to slow inflation by increasing borrowing costs without weakening or even causing a crisis.

Dworkin stated, “This is about seamlessly landing an extremely complicated plane on the runway.” It isn’t easy to do.

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