Michael Barr, the vice chair for supervision at the US Federal Reserve, announced his early resignation, citing the “risk of a dispute” as the country prepares for President-elect Donald Trump’s administration. Appointed to strengthen banking oversight after the 2008 financial crisis, Mr. Barr had advocated for tighter regulations following several bank failures in 2023. Though his term was set to end in 2026, his resignation will allow Trump to nominate a replacement from the Fed’s existing board. Barr emphasized his decision was aimed at avoiding political distractions and maintaining focus on the Fed’s mission.
Mr. Barr’s resignation comes amid a wave of early departures by key officials anticipating significant leadership changes under the incoming administration. Other high-profile figures, such as Securities and Exchange Commission head Gary Gensler and FBI Director Chris Wray, have similarly announced plans to step down. While Barr will remain a Fed governor, his departure underscores tensions around Trump’s potential attempts to reshape regulatory bodies, including reported efforts to test the limits of presidential authority over specific Fed roles.
The Federal Reserve confirmed Barr’s resignation would take effect by February 28 or when a successor is in place, pausing new regulatory initiatives in the interim. This development signals a shift in the Fed’s regulatory agenda as the incoming administration seeks to loosen financial oversight. Barr had previously resisted Republican criticism of his stricter banking rules but ultimately stepped down to avoid a prolonged legal and political battle over the supervisory position.
