Biden’s top bank cop confirmed with strong bipartisan support

The post will now be filled by a former Treasury Department official, confirmed by a strong bipartisan vote, who helped craft financial safeguards passed by Congress in the wake of the 2008 Wall Street crash. Fed administration, made up of seven members, is now fully booked for the first time since 2013.

Barr will take on his new role as regulators to determine whether it’s harder for banks to grow through mergers, how lenders should prepare for the fallout from climate change and what role they should take in volatile markets cryptocurrencies. He will also have a vote on interest rates as the central bank engages in an aggressive war on soaring inflation.

Barr, dean of the University of Michigan’s school of public policy, will face pressure from Democrats to reverse some of the actions taken by his predecessor, an appointee by President Donald Trump. In an interview with POLITICO before his appointment, Barr said he « would have done the job very differently » from the libertarian-leaning Randal Quarles.

It could, for example, work to toughen the annual “stress test” faced by big banks, where each lender’s management and books are scored on how well they would fare during a hypothetical recession.

Still, during his confirmation hearing, he said the loss-absorbing capital buffers of these institutions, designed to deal with unexpected problems, were already « pretty strong ».

Barr’s appointment was a quick turnaround after the White House was forced to remove Raskin. His one-time calls for the Fed to be more assertive on climate change issues led to opposition from all Republicans as well as the senator. Joe Manchin (DW.Va.).

His selection was also notable as he was previously the leading contender for another post as bank regulator, Comptroller of the Currency, but faced fierce resistance from progressive activists who criticized his previous roles advising start-up financial companies like LendingClub and Ripple.

Barr has also invested in digital asset companies and said during his confirmation hearing that cryptocurrencies « have upside potential in terms of economic benefits, and then also significant risks. »

It also has a longstanding focus on small business and consumer advocacy, including ensuring that disadvantaged Americans have access to financial products such as bank accounts. The three federal banking regulatory agencies — the Fed, OCC and FDIC — are modernizing anti-redlining rules designed to encourage lending to low-income and minority borrowers, and he would have a say in final version.