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Nominated by Democratic President Joe Biden as the Fed's Vice
Chair of Supervision, Barr is expected to take a much more
aggressive stance on Wall Street than his Republican predecessor
Randal Quarles. As a former senior Treasury Department official,
Barr helped craft the 2010 Dodd-Frank law that created the Fed
Supervision role and imposed a host of new rules on lenders in
the wake of the 2007-09 financial crisis.
Barr is due to speak at 2:00 p.m. EDT (1800 GMT) at the
Brookings Institution. The Washington think tank said his
remarks will focus on making the financial system "safer and
fairer."
Barr's to-do list includes potentially reviewing bank capital
and trading rules that were relaxed by Quarles, overhauling how
the Fed handles large bank mergers, and stepping up scrutiny of
risks posed by climate change, cryptocurrencies and fintech
firms, according to analysts and policy experts.
With Barr in place, all the major financial regulatory agencies
are now filled with Biden picks, meaning other joint reform
efforts, such as overhauling fair lending rules and the U.S.
Treasury market structure, can also be accelerated.
"It is just so important to have this position filled with a
Biden appointee," said Todd Phillips, director of financial
regulation at the Center for American Progress, a liberal think
tank. "Having Barr allows the Biden bank regulatory agenda to
kick into high gear."
Barr's role gives him extensive powers to supervise the
country's largest lenders, including by setting their capital
levels via a number of rules and annual "stress tests" of their
balance sheets. Some Democratic critics say the annual stress
tests have become too easy and the industry is keen to glean
Barr's views on whether those should be stricter.
Banks are also anxious to get Barr's view on Basel III global
capital requirements, and the "supplementary leverage ratio,"
which banks say has limited their ability to provide liquidity
to the Treasury markets.
Barr is also expected to tackle oversight of large regional
banks, which have dramatically grown following several
high-profile mergers in recent years. He could suggest a number
of ways to ramp up safeguards for such lenders, including
additional capital requirements, said analysts.
"This first speech should provide valuable insight into his
actual priorities and the agenda for his tenure," said Isaac
Boltansky, director of policy research for brokerage BTIG.
(Reporting by Pete Schroeder; Editing by Michelle Price and
Andrea Ricci)
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