U.S. Fed Vice Chair for Supervision Michael Barr to Resign on Feb. 28
Michael Barr, the U.S. Federal Reserve’s vice chair for supervision, will resign on February 28 or sooner if a successor is confirmed, as announced by the Federal Reserve. He will remain a member of the Federal Reserve Board of Governors.
Barr indicated his decision to step down was voluntary to prevent potential conflicts with the incoming Trump administration. He stated that the vice chair position was created post-Global Financial Crisis to enhance responsibility and accountability in financial regulation. Barr deemed it more effective to serve from his role as governor without the distraction of a dispute over the vice chair position.
Jaret Seiberg, a financial policy analyst at TD Cowen, noted that Barr's resignation reflects a troubling trend of politicization in banking regulation, suggesting that banks should prepare for significant policy shifts with each change in presidential administration.
The vice chair of supervision serves as the primary banking regulator in the U.S. Barr influenced the relationship between traditional finance and cryptocurrencies. Despite his prior experience advising Ripple, the issuer of the XRP token, his tenure has had mixed outcomes for the crypto sector. He advocated for the Federal Reserve to regulate stablecoin issuers, which faced opposition from many Republican lawmakers.
Senator Tim Scott criticized Barr for supervisory failures during the 2023 bank crises and for the "disastrous Basel III Endgame proposal." Scott expressed readiness to collaborate with President Trump to ensure competent financial regulators are appointed.
Seiberg believes Barr’s resignation will not significantly impact the Federal Reserve in the short term, as Democrats will hold a majority until early 2026. If Trump wishes to appoint a successor quickly, he may need to choose someone from within the Board of Governors. Michelle Bowman, a former Kansas banking commissioner with experience in community banking and critical of Barr's Basel 3 approach, is considered a logical candidate.
Bowman emphasized the need for “regulatory openness” to foster innovation and new technologies during her speech at the DC Blockchain Summit last year.