The news: Federal Reserve Vice Chair Michael Barr resigned from his position but will remain on the Fed’s Board of Governors until his term expires in 2032.
What this means: The president can’t fire or force out any board members, which complicates President-elect Trump’s ability to replace Barr as vice chair, per Axios. Trump will need to wait until there’s a vacant seat on the board, or promote a current governor.
If Trump elevates a sitting governor to vice chair, that individual would also retain their current position as a governor, giving them more latitude to propose deregulation.
The capital requirements’ fate: Bank lobbies won their capital requirements battle, forcing regulators to revise the initial proposals. In September, Barr revealed that the Federal Reserve would resubmit a proposal to increase big bank capital requirements by 9% instead of 19%, per Reuters.
However, with Trump's election victory, the future of this final rule hangs in jeopardy. And each change in leadership raises the likelihood that these updates may never be fully implemented. We’ll monitor Trump’s replacement for Barr closely, as this will help set the regulatory tone for the banking industry.
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