WASHINGTON — Federal Reserve Board Gov. Daniel Tarullo, the architect of the central bank's post-crisis banking oversight, will resign in April, the central bank said Friday.
Tarullo, who joined the Fed board in January 2009, has headed the board’s supervisory committee and has been seen by many in the industry as serving as a de facto leader on regulatory matters at the Fed.
His resignation letter consists of two sentences: “After more than eight years as a member of the Board of Governors of the Federal Reserve System, I intend to resign my position on or around April 5, 2017,” Tarullo said. “It has been a great privilege to work with former Chairman [Ben] Bemanke and Chair [Janet] Yellen during such a challenging period for the nation's economy and financial system.”
Yellen, who has said she intends to serve out the remainder of her term as chairman through next February, said in a statement that Tarullo “led the Fed’s work to craft a new framework for ensuring the safety and soundness of our financial system following the financial crisis and made invaluable contributions across the entire range of the Fed’s responsibilities. My colleagues and I will truly miss his deep expertise, impeccable judgment, wise insight, and strategic counsel.”
Tarullo was widely expected to resign at some point in 2017, presumably after President Trump nominated someone to serve as vice chair of supervision – a role created by Dodd-Frank that was never filled by the Obama administration. Trump has not named any appointees to fill the two vacancies already on the Fed board. Leading contenders include GE Energy Financial Services CEO and former Treasury official David Nason; FDIC vice chairman Thomas Hoenig; former BB&T Chief Executive John Allison; and Trump adviser Paul Atkins.
There had been some speculation about when or whether Tarullo – who had advised the Obama campaign and was a professor at Georgetown University before joining the Fed – would depart the central bank. Friday’s announcement has effectively put that speculation to rest, and gives the Trump administration three seats on the seven-member board to fill in its first year.
That is already getting some Wall Street reformers nervous. Jordan Haedtler, manager of the Fed Up campaign, said Tarullo’s resignation comes at a “precarious and volatile moment at the Fed and for our economy” and called on the Senate to reject any nominee who will not hold the banking industry accountable as Tarullo has.
“Without him at the helm, we are even more vulnerable to another devastating economic crisis,” Haedtler said. “The Senate should not confirm any nominee for the vice chair for supervision position who is not willing to continue Tarullo's work reining in Wall Street.”