President Biden picked Sarah Bloom Raskin to be the Federal Reserves top banking regulator and Lisa Cook and Philip Jefferson to be governors, individuals acquainted with the choice said Thursday, completing his redesign of authority at the U.S. central bank. The choices of Cook, who might be the first Black lady on the Fed’s board, and Jefferson, who might be the fourth Black man, keep a Biden guarantee to further develop variety at the central bank If every one of the picks are affirmed by the Senate, it would check two firsts for the seven-member panel: four ladies serving together, and two Black governors simultaneously.
The three potential new Board members are in a position to join Jerome Powell — whom Biden chose in November for another four years as chair — and current Governor Lael Brainard, who the president aims to elevate to vice chair. Both Powell and Brainard testified this week in confirmation hearings before the Senate Banking Committee.
The nominations also would add experts focused on a broad recovery in the jobs market as officials seek to contain the hottest inflation in nearly four decades.
The newly configured Fed Board faces a challenging year ahead with the ongoing pandemic threatening the economic recovery and soaring inflation. Investors expect the Fed to start raising interest rates off near-zero levels in March.
While making history with Cook’s nomination, the selection of Raskin to the vice chair for supervision position means the top three positions on Biden’s Fed would still all be held by White officials.
Raskin’s nomination as vice chair for supervision responds to progressive demands for someone who will bring a more pro-regulatory posture to the position than her predecessor, Randal Quarles, who was roundly criticized by Democrats as being too lenient on Wall Street.
Democrats such as Senator Elizabeth Warren of Massachusetts and progressive groups have had a keen interest in who fills the job, publicly calling for somebody who would stand up to megabanks.
The supervision vice chair is Washington’s premier banking overseer, established by the Dodd-Frank Act after the 2008 financial crisis. The official leads the supervision of financial institutions such as JPMorgan Chase & Co. and Goldman Sachs Group Inc. and will likely influence decisions from bank capital rules to how to police the cryptocurrency industry. Raskin is likely to be assailed by Republicans who have been railing against what they see as mission creep outside of the Fed’s narrow statutory mandates, including on issues like climate and racial justice. If all 50 Republicans unite against her, she would need every Democrat in the Senate to support her in order to be confirmed.
Pat Toomey of Pennsylvania, the top Republican on the Senate Banking Committee, reiterated Thursday evening that he has “serious concerns” about Raskin. “I have serious concerns that she would abuse the Fed’s narrow statutory mandates on monetary policy and banking supervision to have the central bank actively engaged in capital allocation,” Toomey said in a statement. White House officials notified some U.S. senators about the news on Thursday night. The White House does not plan for the nominees to appear at an event with Biden, a person familiar with the matter said.
Inclusive Employment The picks are likely to join the dovish wing of the policy debate as officials balance their concerns over inflation against a commitment to seek full employment that is both broad-based and inclusive. If confirmed, they will vote on monetary policy at each Federal Open Market Committee meeting; their views could influence the pace at which the Fed raises interest rates in coming years, and how high the central bank goes.
“No. 1, she’s brilliant. No. 2, she’s such a personable individual,” Kathleen Murphy, president of the Massachusetts Bankers Association, said Thursday. Raskin is married to a prominent Democratic lawmaker from Maryland, Representative Jamie Raskin, who was lead manager for the second impeachment trial of former President Donald Trump. Diversity Push
She is currently a law professor at Duke University. Under the Obama administration she was deputy secretary of the Treasury from 2014 to 2017. Before that she served as a governor at the Fed and as Maryland’s commissioner of financial regulation. Raskin was reportedly considered, and passed over, for other top jobs in the Biden administration, including head of the Office of the Comptroller of the Currency, and a new post within the Treasury heading up climate policy.
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