Michael Barr resigned as Vice President of Supervision of the Federal Reserve in order to not face Donald Trump. The president of the United States has chosen to exchange Michelle Bowman, the favourite of all swimming pools, as introduced on Monday. The monetary sector expects the regulatory calls for on banks to be extra lax with the republican management of the White House and the Capitol and the appointment of Bowman, which have to 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 the Board of Governors of the Federal Reserve since 2018, and has a great experience in inflation, regulation and banking, ”said the president in his social network.
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 Basel III capital standards and surcharges to globally systemic banks had already been significantly reduced since its initial writing after banking and interest groups battle against it for a year. Bowman 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 types of 0.5 points, the first time that a member of the Federal Reserve opposed the collegiate decision of monetary policy since 2005.
The financial sector awaits a more friendly attitude from the new supervision responsible. “The sector could be delighted to call Miki Bowman, and that may assist banks to advance, to do what they need to do, which is to inject capital into the system and contribute to help the expansion of the financial system,” 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 presented January his resignation letter to the president, Joe Biden. 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 cannot dismiss the president of the Federal Reserve, but that is not so obvious regarding the position of supervision. “The danger of a dispute in workplace might be a distraction of our mission.
Silicon Valley Bank’s disaster, Signature Bank and First Republic Bank confirmed how the comfort of supervision on medium banks had prevented from placing options on time to keep away from their fall.
https://elpais.com/economia/2025-03-17/trump-elige-a-michelle-bowman-como-jefa-de-supervision-bancaria-de-la-reserva-federal.html