Fed Reserve’s Tarullo, Who Created Financial Regulations After Crisis, Resigning

Daniel Tarullo, the Federal Reserve’s head creator of the financial regulations after the financial crisis, is gearing up to resign, reported The Wall Street Journal.

According to WSJ, Tarullo on Friday (Feb. 10) wrote to President Trump informing him he will resign around April 5. The move was widely expected, and with his resignation, it removes a big voice for imposing more regulations on banks and non-banks to prevent another financial crisis and meltdown of the banking industry. President Trump and his advisors have been critics of a lot of the rules crafted by Tarullo, the 64-year-old Fed governor.

WSJ noted that shares of big banks gained in trading Friday on news Tarullo is leaving this spring. His departure will also give the Trump administration more discretion to shape the central bank amid accusations the central bank lacks transparency and isn’t accountable to anyone. With Tarullo leaving, three of the seven spots on the Fed’s board of governors will be vacant. What’s more, Janet Yellen’s term as the chairwoman ends in early 2018. Trump could change monetary policy by filling the vacancies, but WSJ noted it’s not clear if Trump will look for officials that would change Yellen’s course when it comes to interest rate increases.

WSJ noted Tarullo’s term doesn’t end until 2022, but many thought he would step down before then, paving the way for Trump to appoint someone else for the post of Federal Reserve vice chairman heading up bank oversight. Tarullo had filled it on an informal basis, but if Trump had named someone for the role, it would have reduced Tarullo’s influence, noted the report. Tarullo told WSJ he had a “fairly strong presumption” that he would resign in the early part of 2018 even ahead of the November election, noted WSJ.