Fed's top voice on financial regulations resigns

Fed's top voice on financial regulations resigns
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Federal Reserve Gov. Daniel Tarullo, the central bank’s dominant voice on financial regulation, has submitted his resignation and will leave his post on April 5.

Tarullo’s exit will create a third opening on the Fed’s board of governors. He had served on the Fed’s board since January 2009.

"Dan 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," Chairwoman Janet Yellen said. "My colleagues and I will truly miss his deep expertise, impeccable judgment, wise insight, and strategic counsel."

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Tarullo was a central figure for the Fed in crafting and implementing the Dodd-Frank financial reform law, and his departure makes clear that the Trump administration will soon dictate the direction of regulation at the agency going forward.

In his brief resignation letter, Tarullo said it was a “great privilege to work with former Chairman Bernanke and Chair Yellen during such a challenging period for the nation’s economy and financial system.”

Tarullo’s exit came days after the Fed’s longtime general counsel, Scott Alvarez, also announced he was planning to leave the institution. Both were key figures in helping the Fed navigate its broad new powers to monitor the financial system following the financial crisis.

With Tarullo’s exit, President Trump will have the opportunity to fill three vacancies at the seven-member Federal Reserve Board. He also has the ability to name a vice chair for supervision at the Fed. That position, created by Dodd-Frank, is meant to serve as the point person for all regulatory matters at the central bank. However, such a role was effectively filled by Tarullo, and President Obama never named someone to that post.

Tarullo's exit does not come as a major surprise, although his term as governor did not expire until the end of 2022.