- Michael Barr will resign as vice chair for supervision on February 28, 2025.
- Barr will continue serving as a governor on the Federal Reserve Board until 2032.
Michael Barr, the Federal Reserve’s vice chair for supervision, announced he will step down from his role on February 28, 2025, in a move that will allow President-elect Donald Trump to appoint a new banking regulator. Barr’s resignation ends a four-year term that was set to last until 2026.
However, Barr will remain a member of the Federal Reserve Board of Governors until 2032. Barr’s decision to leave his post early came after concerns about the potential for a legal battle with the incoming Trump administration. The incoming president had considered removing Barr from his role, a move that could have led to a lengthy and disruptive dispute.
Barr’s legal advisors believed he could have won the battle, but the Fed’s general counsel warned of the negative impact on the institution. This resignation clears the way for Trump to appoint a new vice chair for supervision, which will be crucial as the new administration plans to pursue a more industry-friendly regulatory agenda.
Barr Resigns Shaping Fed’s Future
The Federal Reserve has indicated that it will delay any major rulemaking until Barr’s successor is confirmed. However, Barr’s resignation does not create an immediate vacancy on the Board of Governors, as he will continue to serve in that role.
Barr’s tenure as vice chair for supervision was marked by efforts to impose tougher regulations on the banking sector. He had pushed for stricter capital requirements and increased transparency in the Fed’s stress tests. However, his proposals met strong opposition from banking lobbyists and lawmakers, which led to revisions in his regulatory plans.
Trump’s team is expected to select a new regulatory chief from the current group of Fed governors, with Michelle Bowman and Christopher Waller emerging as potential candidates. Barr’s resignation also comes amid the ongoing debate over the federal government’s stance on crypto regulations, an area where Barr had been vocal about imposing more oversight.
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