- President Joe Biden nominates Michael Barr, a former advisor to Ripple, to be Fed`s big bank regulator.
- Michael Barr has extensive experience and expertise in the traditional and digital financial sectors.
The appointment of former crypto industry adviser Michael Barr as the newest member of Joe Biden’s Fed team highlights how seriously regulatory agencies are taking cryptocurrency. The job is arguably the most important financial regulatory position in the United States. Michael Barr currently serves as the public policy Dean at Michigan Law School.
Joe Biden picks Michael Barr for Fed bank regulation post
On Friday, President Joe Biden announced the nomination of Michael Barr to the Fed position. This appointment comes after Joe Biden’s first pick for the Fed post, Sarah Bloom Raskin, backed out last month. Raskin withdrew amid opposition from Republicans and one Democratic senator, Sen. Joe Manchin of West Virginia.
As previously reported, Raskin’s critics worried that she would use the Fed’s regulatory authority to combat climate change and possibly prevent banks from lending to energy firms. However, in a Friday statement, Joe Biden highlighted the importance of politics in describing his choice, adding that he had already vetted Michael through a Senate vote on a bipartisan basis.
“Michael brings the expertise and experience necessary for this important position at a critical time for our economy and families across the country,” Joe Biden said. The Democratic president added that Michael Barr; “has spent his career protecting consumers, and during his time at Treasury, played a critical role in creating both the Consumer Financial Protection Bureau and the position for which I am nominating him.”
The announcement didn’t mention Barr’s financial-industry background, including a job at Lending Club’s financial technology platform. When he started in 2015, he was hired on the board of Ripple Labs, saying he thought “innovation in payments can help make the financial system safer, reduce cost, and improve access and efficiency for consumers and businesses alike.”
Despite his accomplishments, some liberal commentators last year filibustered Barr’s bid to become the Joe Biden administration’s comptroller of the currency. The post is in charge of national bank regulation. These critics were wary of Barr’s appointments to the advisory boards of Lending Club and Ripple Labs, which they considered potential conflicts of interests.
They further claimed that he had worked to weaken demands for tighter bank regulations during the Obama administration. However, Ohio Senator, Sherrod Brown, the Democratic Chairman of the Banking Committee, vociferously backed Barr.
“Michael Barr understands the importance of this role at this critical time in our economic recovery,” Brown said. “I strongly urge my Republican colleagues to abandon their old playbook of personal attacks and demagoguery and put Americans and their pocketbooks first.”
Republicans have pushed back against some of Joe Biden’s regulatory picks in the Senate. The stance raises questions about Barr’s ultimate confirmation. Though he previously received bipartisan support in the Senate, he may face a steeper path this time around.
Michael Barr’s walk to the highest financial post in the United States
Ripple’s former advisor was a high-ranking Treasury official in the Obama administration. He was involved in creating the 2010 Dodd-Frank Act, which was one of the most sweeping changes to financial regulation in American history. That law was part of one of the most significant banking reform efforts, coming after the 2008-2009 economic crises. However, the most significant facet of his background is in the digital-assets industry.
Based on his background and experience as a member of the Ripple board of advisers, he may have insider knowledge of cryptocurrencies. Barr is a Rhodes Scholar who has served as a Supreme Court judicial clerk for Justice David Souter. Additionally, he has experience working in the White House, the Treasury Department, and State Department during the Clinton administration.
If he is confirmed, he will take on a leadership role in the multi-agency efforts already underway to regulate stablecoins and to consider additional regulations for the rest of the cryptocurrency industry. Some experts are concerned about where his financial loyalties lie, given his past involvement with the crypto market.
The Federal Reserve intends to raise interest rates rapidly in the coming months to reduce chronically high inflation. It will be tough for Fed Chair Jerome Powell to slow inflation by raising borrowing costs without weakening the economy and perhaps causing a recession.
If confirmed for the Federal Reserve post, Barr would oversee JPMorgan Chase, Bank of America, and Citigroup, which are the country’s largest banks. The vice-chair for supervision ensures that the country’s biggest lenders adhere to capital requirements.
Furthermore, he will regularly examine risks and put banks through rigorous stress testing. Barr would also serve as an essential voice on monetary policy as one of the seven members of the Fed’s board of governors who participate at every central bank meeting.