The dramatically different regulatory agendas of VC Bowman and VC Barr reveal why it will be very hard for the Fed to retain its role in sup and reg and also remain independent.
Nick Timiraos
@NickTimiraos
01-26
Miki Bowman says the Fed’s bank examiner corps has been trained to focus too much on paperwork and not enough on real risks. Now she’s slashing what some see as an unnecessarily bloated staff, rethinking the rules, and reopening the investigation into the collapse of Silicon
If we accept the premise that the polarization of finreg along party lines has created serious political risk for the institution, the bigger question is this: Are we heading towards a similar polarization along party lines for monetary policy?
After all, Congress essentially chose the former outcome when it created a VC-S position and then demanded that this person retain full autonomy for the regulatory agenda (first, with Warren's pointed questioning of Powell to ensure he would not interfere with Barr's agenda, and later, when congressional GOP signaled they would cheer any effort by then-President-elect Trump to fire/demote Barr). But I'm not sure Congress really wants a partisan monetary policy.
The polarization on finreg has been 15+ years in the making, beginning with the passage and implementation of Dodd-Frank.
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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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