Tarullo leaving the Fed; Cohn's growing role at White House

Receiving Wide Coverage ...

Farewell: Banks are unlikely to be throwing a lavish farewell party for Daniel Tarullo, the Federal Reserve's "de facto head of bank regulation" and, in the words of the Wall Street Journal, the "lead architect of postcrisis financial regulations," who announced Friday he plans to resign in early April. His departure "will remove from the policy-making debate one of the strongest voices for imposing safeguards on big banks and nonbanks to protect against another meltdown," the Journal said.

Tarullo's resignation, which opens a third vacancy on the Fed's seven-seat board, "is another step forward for the Trump administration's plan to ease rules for Wall Street," the Journal added, "It will also give the new administration a chance to quickly influence U.S. monetary policy." Wall Street Journal, Financial Times, New York Times, Washington Post, American Banker

Andrew Harrer/Bloomberg

Indeed, bank stocks jumped after Tarullo's resignation was announced. "The reaction inside banks was more muted, but likely no less gleeful," the Journal's Heard on the Street column noted. "For the past eight years, firms have done battle with Mr. Tarullo, a former law professor who emerged as the most powerful man on Wall Street. He devised the stress tests that made it harder for banks to return capital to investors, and oversaw risk rules that forced many firms out of once-profitable businesses."

Tarullo himself had some positive words about Trump's plans to roll back financial regulation. In an interview with the FT, discussing Trump's plans for overhauling Dodd-Frank, he said: "Those seven principles seem to me a perfectly good starting point for thinking about regulation."

Point man: Gary Cohn, President Trump's director of the National Economic Council, "has emerged as the most powerful economic policy maker in its early days," the Journal reports, and "is rapidly assembling a growing portfolio that could solidify his influence in the administration for the long term. The White House has designated Mr. Cohn to play a central role on taxes, infrastructure, financial regulation and replacing the Affordable Care Act." Wall Street Journal, New York Times

One person who's not a member of the Gary Cohn fan club is Alan S. Blinder, a former Fed vice chairman and now an economics professor at Princeton. In an op-ed piece in the Journal, Blinder writes that "President Trump seems to be looking for places to direct his ire. Among his recent targets were consumers of financial services. That includes anyone with an individual retirement account, a bank account or a credit card." Given his Goldman Sachs pedigree, Blinder was hoping that Cohn would emerge as "the grown-up in the room. No such luck."

Democrats in the U.S. Senate aren't crazy about Cohn, either. Senators Elizabeth Warren of Massachusetts and Tammy Baldwin of Wisconsin wrote a letter to Cohn's former boss at Goldman, chairman and CEO Lloyd Blankfein, asking for "a full recounting of interactions between the pair" since Cohn left the firm to join the Trump administration, the Financial Times reports. "We are concerned that Mr Cohn ... will be unable to develop economic policies that will help middle-class families, and will instead favor Wall Street over Main Street," the letter said.

Wall Street Journal

Hackers target more banks: A growing number of recent cyberattacks on financial institutions, including those in the U.S., may be the work of North Korean hackers who were behind the 2014 attack on Sony, according to some researchers. "It is unclear to the researchers exactly how many banks were compromised or whether any suffered financial losses," the Journal reports, but the evidence suggests "that the group is broadening its banking attacks" beyond Asia. "Recent attacks on institutions in Poland are part of an international hacking effort targeting financial institutions in the U.S., Mexico and the United Kingdom."

Dear Abby: The Moneybeat column recounts some of the "good, great, and not-so-good" calls made over the past 30 years by Abby Joseph Cohen, the well-known Goldman Sachs investment strategist who announced her retirement last week.

Financial Times

Bargaining chip: The FT editorializes that the Volcker Rule is "a cumbersome regulation of questionable effectiveness," which could make it a "useful poker chip (or, if you prefer, sacrificial lamb) for legislators committed to strong bank regulations. The rule could be offered up in return for a hard commitment from the administration to maintain or, better, strengthen capital requirements. In an environment of political attrition, that would be a win-win proposition."

New York Times

The ups of down: Why falling home prices could be a good thing.

Quotable ...

"When you're dealing with the economy, which is my realm, you have to be pragmatic. You have to be realistic to what's going on in the world and you have to be willing to adapt. I think that's my job, to advise the president on what is the right solution." — Gary Cohn, director of the National Economic Council