The Board of Governors of the Federal Reserve System is undergoing a transition that is giving the Trump administration chances to appoint officials more favorable to its policies regarding bank regulation.
The shuffle began when, citing personal reasons, Stanley Fischer, a member of the Fed Board of Governors and a vice chairman for the board, announced in a letter that he would be stepping down from both posts “effective on or around October 13, 2017.” He will be leaving his term as vice chairman months before its expiration on June 12, 2018.
A Fed spokesperson confirms that this week was Fischer’s last with the Fed.
A former professor of economics at the Massachusetts Institute of Technology (MIT), Fischer, who has been a member of the Fed board since May 28, 2014, was appointed by President Obama for an unexpired term, slated to end Jan. 31, 2020, Fed officials say. At MIT, Fisher was a professor from 1977 to 1999 and associate professor from 1973 to 1977. Prior to his time at MIT, he was an assistant professor of economics and postdoctoral fellow at the University of Chicago.
Fischer’s tenure on the Fed board included his chairmanship of the board’s committee on financial stability, and the committee on economic and financial monitoring and research, officials say. His responsibilities include representing the board internationally on the Financial Stability Board (FSB), the Bank for International Settlements (BIS), the Group of 20, the Group of Seven, the International Monetary Fund (IMF), and the Organisation for Economic Co-operation and Development, officials add.
Prior to his time on the Fed board, Fischer served as governor of the Bank of Israel, from 2005 to 2013, and as vice chairman of Citigroup from February 2002 to April 2005, officials say. He served as first deputy managing director of the IMF from September 1994 through August 2001. He also held the post of chief economist at the World Bank from January 1988 to August 1990.
Fischer’s departure roughly coincides with the nomination and confirmation of Randal Quarles, who will not be replacing Fischer exactly, a Fed spokesperson explains.
Although he has not yet been sworn in, Quarles has been confirmed for a special, short term that will end Jan. 31, 2018. In addition, he has been nominated for a 14-year term that would start Feb. 1, 2018 and end in 2032, the Fed spokesperson says. The Senate will need to confirm him for the full term.
U.S. Senator Orrin Hatch (R-Utah), chairman of the Senate Finance Committee, expressed his support for Quarles’s Senate confirmation.
“Mr. Quarles is eminently qualified to serve in this important position,” Hatch says in a prepared statement. “Through his long experience in public service and the private sector, Mr. Quarles has gained expertise in financial regulation, economics, and the firsthand operations of financial institutions. He also has a proven track record of leadership and policy management.”
In the meantime, Quarles, if fully confirmed, will be taking on the role of vice chairman of supervision, a post that was mandated by the Dodd-Frank Act, which the Trump Team wants to undo. In the post. he would become a fairly powerful voice in the federal government’s supervision of U.S. capital markets.
Quarles is no stranger to the private sector and the federal government. He has been founder and managing director of The Cynosure Group — a private equity firm in Salt Lake City, Utah. Prior to that effort, he served as a partner at private equity giant the Carlyle Group and was the co-head of Davis Polk & Wardwell.
His tenure in government includes: his post as undersecretary for domestic finance during the George W. Bush administration; assistant secretary of the Treasury for International Affairs; and U.S. Executive Director of the IMF. In another government stint, he served in the George H.W. Bush administration as deputy assistant secretary for financial institutions policy.
The Washington nomination and confirmation merry-go-round is likely to continue as Fischer’s resignation and Quarles’s confirmation guarantee only that four of the seats for the Fed board will be filled while the three remaining positions are open.
But the confirmation spotlight is likely to shine on President Trump and his choice for chairperson of the Fed board, a post now held by Janet L. Yellen, whose four-year term ends Feb. 3, 2018.
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