Federal Reserve Vice Chair for Supervision Michael Barr confirmed an exclusive Dec. 23 Reuters report that he had sought legal advice from law firm Arnold & Porter on how to handle a potential attempt by Donald Trump’s incoming administration to fire him – a potentially unprecedented move that could have sparked a messy legal test of the Fed’s independence. Barr on Monday told Reuters that after seeking legal counsel he had decided to step down in order to avert that potential confrontation which would have been a “serious distraction.”
Why it matters
Barr’s early exit clears the way for Trump, who will be sworn in on Jan. 20, to appoint an entirely fresh slate of banking regulators and begin work on a more industry-friendly agenda, although Barr’s decision to remain as a governor limits Trump’s immediate options.
