Barr Departs Fed Panel On Supervision

Former Federal Reserve Vice Chair for Supervision Michael Barr has stepped off the US central bank's internal governing Committee on Supervision and Regulation, leaving the panel without a chair. 

The move leaves Fed Vice Chair Philip Jefferson and Governor Michelle Bowman as the only two members on the committee. Barr, as well as the other six governors on the Fed board, all have a final vote on whatever rule the panel puts out.

Barr resigned as vice chair for supervision last week, bypassing a potential fight with President Donald Trump over the role. He said in January “the risk of a dispute over the position could be a distraction from our mission.” 

The role was established by the Dodd-Frank Act, a sweeping 2010 law passed after the financial crisis. Since Barr is staying on as a member of the Fed's Board of Governors, Trump would likely have to appoint a new vice chair for supervision from the existing pool of board members since the next vacancy isn't expected until 2026.

Fed Chair Jerome Powell told the House Financial Services Committee last month the board would continue its work on supervision, and noted the position can lead to “volatility” that was “not great for the institutions that we want to regulate.”

Read More: Powell Says Fed's Top Bank Cop Role Leads to More Volatility

Former Fed Governor Daniel Tarullo, one of the most influential on bank oversight in the central bank's history, didn't have the vice chair for supervision title but held a commanding grasp on Fed regulatory and supervisory policy. The Fed typically has a lead governor in charge of supervision and regulation. 

Barr continues to serve on other Fed panels, including the Committee on Financial Stability and Committee on Payments, Clearing, and Settlement.