Policy & Regulation

President Biden will nominate Sarah Bloom Raskin to be the Federal Reserve’s vice chair for Supervision and Lisa Cook and Philip Jefferson to be governors. The selections keep a Biden promise to improve diversity at the Fed.

Fed Gov. Lael Brainard, President Biden's nominee for Federal Reserve vice chair, sought to assure GOP members of the Senate Banking Committee she favors a more limited supervisory approach that would help larger banks identify pockets of risk in their loan portfolios.

Jerome Powell sought to strike a political balance at his reconfirmation hearing. He assured Republicans the Federal Reserve wouldn't overstep its authority on bank mergers and other matters, while telling Democrats the central bank has a responsibility to monitor financial stability and the risks of climate change.

Federal Reserve Vice Chair Richard Clarida intends to resign from the board of governors on Jan. 14, two weeks before his term is due to expire.

Central bankers need to speak up about economic barriers prompted by racism and the need for inclusion and diversity, Federal Reserve Bank of Atlanta President Raphael Bostic said, a response to critics who see the work as a distraction from the Fed’s main goals. 

The government-sponsored enterprise also unveiled two new tranche slices for investors to purchase.

While some in the industry support the change, mortgage broker trade group AIME called on the agency to reconsider it.

Sarah Bloom Raskin, reportedly the Biden administration's top candidate for vice chair of supervision, would toughen the Federal Reserve's stances on the role of banks in combating climate change, capital requirements, the Volcker Rule and other policy areas, experts say.

The Senate Banking Committee will hold separate hearings next week for Jerome Powell on his nomination to a second term as Federal Reserve chair and for Lael Brainard’s elevation to vice chair.

The Trump-appointed head of the Federal Deposit Insurance Corp., Jelena McWilliams, said she plans to leave the agency in early February. The announcement comes weeks after Democratic appointees making up a majority of the board had threatened her leadership by acting on policy related to bank mergers without her consent.