President Trump made the first move Monday to put his stamp on the Federal Reserve, announcing he intended to nominate investment-fund manager Randal Quarles to a key post overseeing the central bank's regulatory efforts, the White House said.
The nomination, if confirmed by the Senate, would fill one of three vacancies on the Fed's seven-member board of governors with a veteran of Washington and Wall Street who is expected to be friendlier toward the banking industry than recent Democratic appointees.
Quarles could become a key ally for the Trump administration and congressional Republicans as they seek to roll back some of the stricter financial regulations enacted after the 2008 financial crisis.
Quarles' nomination has been rumored for weeks. He is a founder and managing director of the Cynosure Group, a private investment firm in Salt Lake City. Before that, he was a partner at the Carlyle Group, a high-profile private equity firm.
A former Treasury official during the George W. Bush administration, he has publicly opposed mostly liberal calls to break up the biggest banks and has supported Republican efforts to have the Fed adopt a rules-based approach to monetary policy to make interest rate moves more predictable.
But Quarles' biggest effect probably would be on financial regulation.
In addition to being nominated to a board seat, he is being tapped to be the Fed's vice chair for supervision. The position was created by the 2010 Dodd-Frank financial regulatory overhaul to oversee the Fed's expanded role in regulating and supervising the nation's largest bank holding companies.
President Obama never nominated anyone to fill the position. Former Fed board member Daniel Tarullo, who stepped down in April, had taken on much of the job's responsibilities.
Although major regulatory decisions must be approved by a majority of the board of governors, the vice chair for supervision is charged with developing policy recommendations and would have a major role in overseeing banks and other financial firms under the Fed's authority.
Trump soon could have more nominees for the Fed's board, putting him in a position to quickly reshape it. There are two other vacancies that he is expected to fill soon.
In addition, Janet L. Yellen's term as chairwoman expires in February. If Trump were to decide not to reappoint the Obama nominee for another term, she probably would follow precedent and resign although she could remain as just a board member until 2024.
Likewise, the term of Fed Vice Chairman Stanley Fischer, another Obama nominee, expires next June and Trump could opt against reappointing him as well. That probably would lead to another vacancy.
Quarles' biography said he "spent many years working as a partner at the Wall Street law firm of Davis Polk & Wardwell, where he was the co-head of the firm's Financial Institutions Group and advised on transactions that included a number of the largest financial sector mergers ever completed."
Quarles also has extensive experience in Washington. He served as Treasury's under secretary for domestic finance, as well as assistant secretary for international affairs and the U.S. executive director of the International Monetary Fund.