President Biden Nominates 'Regulation Advocate' Former Deputy Treasury Secretary Raskin as Fed Vice Chair

Both Fed Board Seats Nominated to Black Candidates

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Byunghee Park] U.S. President Joe Biden has nominated Sarah Bloom Raskin, former Deputy Treasury Secretary, as Vice Chair of the Federal Reserve (Fed), the central bank, Bloomberg News reported on the 13th (local time), citing sources. According to officials, the White House notified the Senate of the nomination late in the afternoon.

Raskin, the nominee for Fed Vice Chair, served as a Fed Board member during President Barack Obama's first term and as Deputy Treasury Secretary during Obama's second term.

If Raskin passes Senate confirmation, she is expected to take charge of bank supervision as Vice Chair. She is anticipated to implement stronger regulations than her predecessor, Randall Quarles. Quarles was criticized by Democrats for being too lenient on Wall Street banks. Progressive Democrats, including Senator Elizabeth Warren, known as the "Wall Street Grim Reaper," have argued that the successor to Vice Chair Quarles should be someone who can take a tougher stance against large banks.

Raskin, who served as a Fed Board member from 2010 to 2014, was a progressive figure deeply involved behind the scenes in the enactment of the Dodd-Frank Act, a financial reform law. She has also advocated that financial authorities must actively respond to the climate change crisis.

The Republican Party is likely to oppose Raskin's nomination.

Senator Pat Toomey, the Republican ranking member of the Senate Banking Committee, expressed on the 11th that he is very concerned about Raskin being the leading candidate for Fed Vice Chair. Senator Toomey pointed out, "Raskin has argued that the Fed should regulate Wall Street banks so that they cannot lend to fossil fuel companies and exclude such banks from the Fed's emergency support."

Bloomberg reported that if all 50 Republican senators oppose Raskin's nomination, all Democratic senators would need to support her for her to be confirmed by the Senate.

If Raskin is confirmed by the Senate, both Fed Vice Chair positions will be held by women. Earlier, President Biden nominated Fed Board member Lael Brainard as Vice Chair.

President Biden also nominated Lisa Cook, an economics professor at Michigan State University, and Philip Jefferson, a professor at Davidson College, as Fed Board members. Both newly nominated professors are Black. Notably, Professor Cook will become the first Black female Fed Board member in the Fed's 108-year history. Until now, there have been only three Black Fed Board members, all of whom were men.

If all nominees pass Senate confirmation, the Fed will, for the first time in a long while, fill all seats on the Board of Governors with one Chair, two Vice Chairs, and four Board members. All nominees must be confirmed by the Senate.

Bloomberg explained that this personnel move reflects President Biden's intention to increase gender and racial diversity at the Fed and to add moderate voices to the Fed, which has signaled strong tightening this year.