Michael Barr not to face Donald Trump. The president of the United States has chosen to replace Michelle Bowman, the favorite of all pools, as announced on Monday. The financial sector expects the regulatory demands on banks to be more lax with the republican control of the White House and the Capitol and the appointment of Bowman, which must be confirmed by the Senate.
“I am pleased to announce that Michelle Miki Bowman will be the new supervision vice president of the Federal Reserve. Miki has been honorably serving at the Board of Governors of the Federal Reserve since 2018, and has a great experience in inflation, regulation and banking ”,
Barr’s resignation left in the air the plans to force large banks to have much more capital to cushion losses and face a hypothetical financial crisis. The proposal for the full application of the capital standards of Basel III and of surcharges to globally systemic banks from their initial writing after banking and Bowman interest groups had also been critical of these proposals.
A decree issued by Trump last month limits the power of independent federal agencies. Although expressly excluding what is related to the fixation of monetary policy by the Federal Reserve, it is applied to the scope of regulation and supervision. That will force the Fed to present a draft of its proposals for the White House to review it.
Bowman, a graduate in advertising and journalism and without great macroeconomic knowledge, arrived at the Central Bank appointed by Trump in 2018 for his experience in community banks. She was previously commissioned by the state bank of Kansas and vice president of Farmers & Drugs Bank. In 2018, he became a member of the Board of the Federal Reserve, where he has presided over the Regional and Community Banking subcommittee. Last September he voted against the reduction of 0.5 points types, collegiate of monetary policy since 2005.
The financial sector awaits a more friendly attitude from the new supervision responsible. “The sector would be delighted to name Miki Bowman, and that can help banks to advance, to do what they should do, which is to inject capital into the system and contribute to support the growth of the economy,” said David Solomon, CEO of Goldman Sachs, in an interview with Fox Business last week.
His predecessor held the position of vice president of supervision from July 2022 until last month. Barr the Federal Reserve released a statement in which the Central Bank counselor made it clear that he resigned to avoid confronting Trump about his permanence in office. The law makes it very clear that Trump but that is not so obvious regarding the position of supervision. “The risk of a dispute in office could be a distraction of our mission. In the current environment, I have determined that it would be more effective serving the American people from my governor post, ”said Barr.
Silicon Valley Bank’s crisis, Signature Bank and First Republic Bank showed time to avoid its fall.
