Tue. Jan 18th, 2022

Sarah Bloom Raskin has emerged as the frontrunner for the top regulatory position at the Federal Reserve, with the Biden administration expected to announce her nomination in the coming days.

The former Fed governor – who previously served as deputy secretary of state in the Obama administration – is expected to be named vice president of oversight at the US Federal Reserve, according to people familiar with the matter.

If confirmed by the Senate, Raskin, a Democrat and former Maryland Financial Regulation Commissioner, will be tasked with guiding the central bank’s oversight of the largest and most important financial institutions and drawing up new rules to ensure their reliability. and ensure stability.

She would replace Randal Quarles, whose term ended In October. The Trump appointee, who took office in 2017, introduced several rule changes during his tenure in an effort to “adjust” regulations introduced after the global financial crisis.

Quarles’ critics, largely from the progressive wing of the Democratic Party, said those amendments – particularly the easing of restrictions on banks – weakened the regulatory apparatus and restored the foundations of the financial system.

Elizabeth Warren, the Democratic senator from Massachusetts, told Quarles during a hearing in May that “the financial system will be safer if you go away”.

Raskin, a law professor at Duke University, has the support of a wide range of President Joe Biden’s Democratic Party. She is expected to take a tougher stance on the banking industry given her close involvement in helping to implement the post-crisis rules during her time at the Fed.

She was initially nominated to the Board of Governors in 2010 along with Janet Yellen, who later became Fed chair and now serves as Treasury Secretary. Raskin left her post at the Fed in 2014 to become second-in-command at the Treasury.

She also received praise from progressive people for her stance on climate change and the need for regulators to take those risks more seriously when considering oversight issues.

The Biden administration also has the task of filling two more vacancies on the Fed’s board of governors. The president is apparently considering Lisa Cook, a professor at Michigan State University who previously served on the White House Board of Economic Advisers during the Obama administration, and former Fed economist Philip Jefferson, now at Davidson College.

The White House declined to comment on the likely nominations of Raskin, Cook and Jefferson.

Biden had considerable leeway to form the top ranks of the central bank. In November, he nominated Jay Powell to a second term as Fed chairman and elevated Lael Brainard, a Fed governor, to the position of vice chairman. Powell and Brainard will face the Senate Banking Committee in separate hearings next week, and both are expected to receive sufficient support to be confirmed.

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