Federal Reserve Governor Randal Quarles said he will resign at the end of the December, opening another vacant spot and giving President Biden a chance to reshape the U.S. central bank.
Quarles recently finished out his term as the Fed’s first-ever vice chairman of supervision of U.S. banks, a role created after a major financial crisis in the 2007-2009 Great Recession. He was tasked with ensuring that U.S. financial institutions were financially sound.
The resign of Quarles leaves two open seats on the seven-member board of governors, the Fed body that helps set U.S. interest rates and sets other financial rules.
The Biden administration is also considering whether to nominate Fed Chairman Jerome Powell for a second term — a decision that could have far-reaching reverberations. His term as chairman ends in February.
The term of another member, Fed Vice Chairman Richard Clarida, also expires at the end of January.
Left-leaning members of the Democratic party have pressed Biden to bypass Powell and choose another candidate who would take a tougher stance on bank regulation and give greater weight to climate change when formulating policy.
Yet Wall Street is betting that Powell will be renominated to ensure the economy has steady leadership at a sensitive time as the U.S. emerges from the worst pandemic in a century.
Powell has aggressively sought to prop up the economy by reducing interest rates to record lows and taking other unprecedented steps. The Fed is now in the process of phasing out its boldest program — the purchase of trillions of dollars in bonds.
Quarles, for his part, was criticized by liberals for easing some of the strict financial rules put in place under the 2010 Dodd-Frank law.
His role as the Fed’s top bank supervisor won plaudits from other financial experts, however. The U.S. banking system is now considered very stable.
Before joining the Fed in 2017, Quarles had spent much of his career in investing banking. He also served several stints at the U.S. Treasury Department and worked briefly at the International Monetary Fund.
The Biden White House has still not nominated a new vice chair of supervision, but the departure of Quarles could hasten a decision.