Federal Reserve's Vice Chair for Supervision Michael Barr Set to Depart
Investing.com -- Federal Reserve Vice Chair for Supervision Michael Barr is preparing to step down. The U.S. central bank announced on Monday that Barr will leave his position on February 28, 2025, though this date could be moved up if his successor is approved sooner. However, Barr will continue to serve as a member of the Fed's Board of Governors.
The role of Vice Chair for Supervision was created to enhance the Federal Reserve's oversight and regulation of the financial system following the Financial Crisis, as well as to increase transparency and accountability. Barr expressed concerns that any disputes over this position could overshadow the central bank's mission.
Barr's departure could impact a significant proposal from U.S. regulators that aims to require the country’s largest credit institutions to hold significantly more capital to cover potential losses. Barr played a key role in negotiations over this plan designed to prevent future bank failures and systemic financial crises.
Michael Barr has served as Vice Chair for Supervision since July 19, 2022. His departure is seen positively by some, given his recognition as an advocate for stricter sector regulations and capital rules. His resignation could potentially avert a prolonged legal battle due to suggestions that President Trump considered removing him from office.
The Federal Reserve Board confirmed that no major rulemaking will take place until a successor to the Vice Chair for Supervision is approved. In this role, Barr oversaw the regulation of financial firms within the Board’s jurisdiction and collaborated with other banking regulators, ensuring the banking system remained a source of strength even during stresses earlier in 2023.
Before his appointment, Barr held various positions, including Dean of the Gerald R. Ford School of Public Policy at the University of Michigan and law professor. He also served in senior policy roles at the U.S. Department of the Treasury and clerked for Justice David H. Souter at the U.S. Supreme Court. He is a graduate of Yale University, Oxford University, and Yale Law School.
In his resignation letter to President Joe Biden, Barr expressed gratitude for the opportunity to serve as Vice Chair for Supervision of the Federal Reserve Board. He also thanked President Powell, other Federal Reserve Board officials, the presidents of Federal Reserve banks, and the Federal Reserve staff for their commitment to safeguarding the American economy and serving the American people.