Michael Barr, the top banking regulator at the US Federal Reserve, has announced his early resignation, citing the “risk of a dispute” as Washington prepares for a new administration under President-elect Donald Trump. Barr, who had previously called for stricter bank oversight after a series of bank failures, faced significant pressure from Republicans, though he had resisted calls to resign before his term ended.
In his resignation statement, Barr emphasized that the potential for conflict over the vice chair for supervision position could distract from the Federal Reserve’s broader mission. He also clarified that he would remain on the Fed board but in a reduced capacity, continuing to serve in a governor role. Barr’s decision paves the way for Trump to appoint a new supervisory official from within the existing Federal Reserve board.
Barr’s resignation is part of a wider trend in Washington, with several top officials pre-emptively stepping down as the Trump administration prepares to take office. Other prominent figures like Gary Gensler, head of the Securities and Exchange Commission, and FBI Director Chris Wray, have also announced early departures, anticipating they will be replaced by the incoming president.
The Federal Reserve’s independence has been a key concern, as the president can only remove board governors “for cause”, but the rules around specific roles within the Fed remain unclear. Barr had initially intended to serve out his term but ultimately chose to step down due to the political climate.
His resignation will be effective when a successor is confirmed, with the Federal Reserve confirming it will not introduce new regulations until Barr’s replacement is in place.
