Sarah Bloom Raskin has emerged as the frontrunner for the top regulatory job at the Federal Reserve, with the Biden administration expected to announce her nomination in the coming days.
The former Fed governor — who previously served as deputy secretary of the US Treasury in the Obama administration — is expected to be tapped for the vice-chair of supervision at the US central bank, according to people familiar with the matter.
If confirmed by the Senate, Raskin, a Democrat and former commissioner of financial regulation in Maryland, would be tasked with leading the central bank’s oversight of the largest and most important financial institutions and crafting new rules to ensure their soundness and stability.
She would replace Randal Quarles, whose term ended in October. The Trump appointee, who stepped into the position in 2017, introduced several rule changes during his tenure in an effort to “tailor” regulations put in place after the global financial crisis.
Quarles’s critics, largely from the progressive wing of the Democratic party, said those modifications — in particular the easing of restrictions on banks — weakened the regulatory apparatus and in turn the foundations of the financial system.
Elizabeth Warren, the Democratic senator from Massachusetts, told Quarles at a hearing in May that “the financial system will be safer when you are gone”.
Raskin, a law professor at Duke University, has backing from a broad swath of president Joe Biden’s Democratic party. She is expected to take a more stringent stance on the banking industry given her close involvement in helping to implement the post-crisis rules during her time at the Fed.
She was initially nominated to the board of governors in 2010 alongside Janet Yellen, who later became Fed chair and now serves as Treasury secretary. Raskin left her post at the Fed in 2014 to become second-in-command at the Treasury.
She has also garnered acclaim from progressives for her stance on climate change and the need for regulators to more seriously consider those risks when considering supervisory matters.
The Biden administration is also tasked with filling two more vacancies on the Fed’s board of governors. The president is reportedly considering Lisa Cook, a professor at Michigan State University who used to serve on the White House Council of Economic Advisers during the Obama administration, and former Fed economist Philip Jefferson, now at Davidson College.
The White House declined to comment on the likely nominations of Raskin, Cook and Jefferson.
Biden has had considerable leeway to shape the top ranks of the central bank. In November he nominated Jay Powell to a second term as Fed chair and elevated Lael Brainard, a Fed governor, to the position of vice-chair. Powell and Brainard will face the Senate banking committee in separate hearings next week, and both are expected to garner sufficient support to be confirmed.
