Michael Barr is stepping down as the Fed’s top regulator on Wall Street

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The US central bank announced on Monday that Michael Barr will step down from his position as the top regulator on Wall Street, but will remain governor of the Federal Reserve.

Barr is scheduled to step down as vice president to oversee at the end of February, cutting short a four-year term that began in July 2022. He will remain governor until that term ends in January 2032, meaning there will be no new vacancy on the seven-member Board of Governors. Members.

Barr said in a statement that he resigned over concerns that “the risk of discord over the position could be a distraction” to Parliament. Federal Reserve BankIts goal is to protect the American financial system.

“In the current environment, I have decided that I will be more effective in serving the American people in my role as governor,” he said.

His decision comes ahead of Donald Trump’s return to the White House. The president-elect has pledged to reduce regulations during his second term, and his advisers are said to be considering demoting Barr.

Since Barr will remain as Fed governor, Trump will have to choose a new vice president to oversee from among the current group of governors. They include officials such as Christopher Waller and Michelle Bowman, both of whom were chosen by Trump for their positions during his first term as president. Bowman in particular has emerged in recent years as a vocal opponent of many of Barr’s proposed rule changes.

The Fed said Monday that it will not do any “major rulemaking” until its successor is confirmed by the Senate.

Since Barr assumed the top regulatory role in the US government and pledged to impose tougher rules on major lenders, the Fed has faced intense legal pressure from banking lobbyists. Some of those groups foot A lawsuit filed in December against the central bank over the stress testing framework, which aims to identify weaknesses in certain institutions in times of economic or financial stress.

The Fed was already considering what it described as “significant changes” to stress tests in order to reduce volatility around the results and make the process more transparent. Changes could include adjusting models that calculate default losses for banks, averaging results over two years to reduce the risk of large year-on-year fluctuations, and allowing the general public to comment on hypothetical scenarios each year before they are finalized.

Last year, it was par Forced To review his landmark proposal to raise capital requirements on lenders such as JPMorgan Chase and Goldman Sachs. A bipartisan group of US lawmakers, CEOs of the largest banks and lobbyists have launched a fierce opposition campaign against the implementation of the so-called Basel III endgame – final rules tied to an international effort to support the sector in the wake of the 2008 financial crisis.

In September, Barr unveiled new proposals that would nearly halve the increase in capital requirements to 9 percent for the largest US banks, versus the 19 percent initially floated.

Barr said in his resignation letter to US President Joe Biden that it was “an honor and privilege to serve as Vice Chairman of the Federal Reserve for Supervision, and to work with colleagues to help maintain the stability and strength of the American financial system.” So you can meet the needs of American families and businesses.”