Trump administration narrows list for Fed regulatory post
Treasury Secretary Steven Mnuchin says the administration was “very close” to filling the regulatory post, which will play a critical role in President Donald Trump’s efforts to revamp regulation of the financial sector.business Updated: Apr 13, 2017 11:12 IST
A former U.S. Treasury official in the George W. Bush administration, a veteran banking lawyer, and a Harvard professor are three leading candidates as the Trump administration looks to fill the post of Federal Reserve vice chair in charge of banking oversight, people familiar with the matter said.
Treasury Secretary Steven Mnuchin told the Wall Street Journal on Wednesday that the administration was “very close” to filling the regulatory post, which will play a critical role in President Donald Trump’s efforts to revamp regulation of the financial sector.
Randal Quarles, who worked as under secretary for domestic fiance at the Treasury under President George W. Bush, met with Mnuchin and Gary Cohn, Trump’s director of the National Economic Council, last week to discuss the role, four sources told Reuters.
Quarles, along with corporate attorney Thomas Vartanian and Harvard Law professor Hal Scott, have all interviewed for the role, according to a source familiar with the talks. Several financial industry lobbyists believe Quarles to be the favorite for the position. But others say it remains unclear who the administration is favoring, and Trump could still opt for another candidate.
Quarles, Vartanian and Scott all did not respond to requests for comment. The Treasury Department and White House declined to comment.
Quarles, who worked as a partner at private equity firm the Carlyle Group, currently runs a private investment firm, the Cynosure Group, from Salt Lake City, Utah. He also served in the Treasury Department under President George H.W. Bush, and was the U.S. executive director of the International Monetary Fund.
In an op-ed in the Wall Street Journal in March 2016, Quarles and Lawrence Goodman, another former U.S. Treasury official, argued against breaking up big banks because it risks damaging the wider economy. He has also talked about refining Obama-era financial rules, introduced in the wake of the financial crisis.
Quarles is married to Hope Eccles, and works alongside Spencer Eccles, two members of the Utah family that includes Marriner Eccles, the former Fed chairman whose name graces the building that now houses the central bank in Washington.
Vartanian has also been mentioned as a candidate for the vice chair position. A financial services attorney for the Dechert law firm based in Washington, Vartanian has assisted large financial institutions with a host of complex transactions, and written frequently on financial rules. He recently filed a brief on behalf of the U.S. Chamber of Commerce as part of MetLife’s case against federal regulators seeking to impose stricter rules on the insurance company. He also served in President Ronald Reagan’s administration.
As director of international financial systems at Harvard Law School, Scott’s focus has been on financial firms, regulation and capital markets. Scott is director of the Committee on Capital Markets Regulation, a research group made up of financial industry representatives and academics that has been critical of financial regulations.
At Harvard, Scott also worked alongside Senator Elizabeth Warren, who has emerged as the Democratic Party’s strongest voice in favor of strict rules on the financial sector.
Speculation over who will fill the vice chair post has been intense on Wall Street and in Washington, as the open spot is widely seen as a critical position for Trump to follow through on his vows to relax rules on the financial sector. The position was created as part of the 2010 Dodd-Frank financial reform law, but was never filled by President Barack Obama.
Chatter ramped up after the apparent favorite for the post removed his name from the running. General Electric executive David Nason withdrew his name from consideration in March, after he had been vetted for the post.
Former Fed Governor Daniel Tarullo effectively filled the role as top regulatory voice at the Fed under Obama, but he stepped down at the beginning of April. Current Fed Governor Jay Powell has taken on those issues for the time being.