A watchdog committee of the Federal Reserve will not have a designated chair after Wednesday when the term of vice chair for supervision Randal Quarles expires since the Biden administration has not named a replacement.
This comes at a time when there are open questions about Jerome Powell's future at the central bank.
Questions swirling around Washington now are how the Fed’s Banking Regulation Committee ensures applications for pending mergers, regulatory issues and other Wall Street matters are handled properly. Quarles was the first person nominated for the position created under the 2010 Dodd-Frank law that revamped financial rules. He will complete his term as leader of the global Financial Stability Board, which expires in December. Republicans have asked him to stay on as a governor until 2022.
Quarles a Trump appointee
The Fed said Quarles, a Donald Trump nominee, will be one of three members on the subcommittee overseeing financial regulations. He’ll be joined by Lael Brainard, a Barack Obama nominee, and another Trump appointee, Michelle Bowman.
The central bank said the banking supervision committee will meet “as necessary on an unchaired basis,” and matters before it “will proceed to the full board only where there is broad consensus among the committee members.”
Quarles spent the majority of his time as leader of the committee on emergency measures the Fed took to combat Covid-19’s impact on the economy, which included slackening regulations on Wall Street.
As of Wednesday afternoon, President Joe Biden has not named anyone to replace Quarles as vice chair, but White House officials said the president is communicating with his administration’s economic team on Fed leadership matters.
Washington is abuzz with the question about whether the administration renominates Fed chair Jerome Powell to a second four-year term in February.
While the White House hasn’t commented on Powell’s appointment, the chair enjoys bipartisan support in Congress. However, left-leaning Democrats are calling for his replacement. At a recent Senate Banking Committee hearing, Sen. Elizabeth Warren, D-Massachusetts, called the chair “a dangerous man” for relaxing regulations for the country’s biggest banks.
Treasury Secretary Janet Yellen said at one point she favoured the idea of Powell continuing at his post, but she hasn't commented on the issue lately.
Progressive Democrats back Brainard for the next chair, but he has said that large banks should take steps to manage climate-related risk, a stance not favoured by Republicans. If Powell is renominated, Brainard is a possibility for the top regulator position at the Fed.
Capital.com reached out the the Federal Reserves Tuesday, but didn't receive a response.