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Barr, a former Treasury Department senior official under
President Barack Obama, looks to be well-positioned to win
Senate confirmation after receiving early support from key
moderates and progressive Democrats in the evenly divided
chamber. He will testify before the Senate Banking Committee at
10 a.m. ET (1400 GMT).
In his prepared testimony, Barr said he would work to ensure the
financial system is resilient, operates fairly, and allows room
for innovation with "clear rules of the road."
He is in a stronger position than Sarah Bloom Raskin, Biden's
first nominee for Fed supervision vice chair, who withdrew her
nomination after Democrat Joe Manchin refused to back her.
Barr, currently a law professor, has already drawn support from
moderate Democrats, including Manchin, and progressives anxious
to ramp up scrutiny of Wall Street after what they say was
regulatory easing under Republicans. At Treasury, Barr was a
central figure in the drafting of the 2010 Dodd-Frank financial
reform law, which established a range of safeguards following
the 2008 financial crisis.
"This is going to be a far easier, simpler and faster hearing
than we saw last time," said Isaac Boltansky, director of policy
research for brokerage BTIG, adding that Barr should be
confirmed by August.
Barr would fill the remaining vacancy on the Fed board and take
on a broad agenda that is likely to include revisiting rules
that were eased under his predecessor, Randal Quarles, and
taking steps to address climate change risk, fintechs and
cryptocurrencies.
Raskin withdrew her nomination after Manchin, who represents
coal-producing West Virginia, opposed her because she had called
for financial regulators to more aggressively police climate
change risks. The decision effectively ended her nomination.
But Manchin announced Tuesday he would back Barr. In the
progressive wing, Elizabeth Warren, a prominent big-bank critic,
said in April that she supported Barr.
Progressives have changed their tune on Barr after opposing him
last year for comptroller of the currency, another top
regulatory post. They wanted a more liberal pick, saying his
work in the private sector, as well as his resistance to some
stricter Dodd-Frank proposals, were marks against him.
However, after progressives' preferred candidates, including
Raskin and Saule Omarova, a previous Biden pick for comptroller
of the currency, flopped amid resistance from moderate
Democrats, they are now eager to simply fill key posts.
The Fed's regulatory work, for example, has slowed with no
fulltime supervision chief.
"The Fed urgently needs a vice chair on board who can guard
against risks to financial stability," said Carter Dougherty, a
spokesman for advocacy group Americans for Financial Reform.
If confirmed, Barr will also join 18 other Fed policymakers in
setting the course of monetary policy as the central bank
battles to bring down 40-year-high inflation. Barr’s views on
monetary policy are not well known, but so far policymakers have
been unanimous in pivoting to a more aggressive stance as price
pressures have persisted. Barr noted in his prepared testimony
that he would be "strongly committed" to bringing down inflation
if confirmed.
(Reporting by Pete Schroeder and Lindsay Dunsmuir; Editing by
Michelle Price and Leslie Adler)
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