WASHINGTON (AP) — Randal Quarles, who served in top Treasury Department positions under two Republican presidents, has been nominated by President Donald Trump to take a key position on the Federal Reserve board in charge of overseeing the banking system.
The selection, announced by the White House late Monday, marked Trump's first effort to reshape the nation's central bank, an institution he criticized during the campaign both for its low-interest rate policies, which he said were helping Democrats, and its action to implement the sweeping Dodd-Frank Act passed in response to the 2008 financial crisis.
Quarles, 59, was picked to serve as the Fed's vice chairman for bank supervision. The position gives him a key role in the administration's efforts to loosen the banking regulations imposed by the Dodd-Frank legislation Congress passed in 2010. The Dodd-Frank measure was aimed at cracking down on the risky bank practices that contributed to the 2008 financial crisis.
Quarles had been considered a front-runner for the job for months. The brief announcement gave no indication of when the administration might fill the other two vacancies on the seven-member Fed board, all of which will require Senate confirmation.
Quarles was nominated for a vacant Fed board term that expires on Jan. 31 and for an additional 14-year term that would expire on Jan. 31, 2032. He was also nominated for a four-term term as vice chairman for supervision.
Quarles currently heads the Cynosure Group, a Salt Lake City-based investment firm that he co-founded. Quarles was previously a partner in the Carlyle Group, one of the world's largest private equity firms.
During the campaign, Trump promised to "dismantle" the Dodd-Frank law, which Republicans believe has hurt economic growth by imposing burdensome regulations that are discouraging banks from lending.
If confirmed by the Senate, Quarles will be in a key position to oversee any changes to banking regulations. Quarles is seen as a more moderate choice for the Fed post than some more ideological candidates that the Trump administration had considered.
While the post of vice chairman for bank supervision was created by the Dodd-Frank law, it was never filled by the Obama administration. Daniel Tarullo, a Fed board member who stepped down in April, had essentially done the job. But he was never formally nominated by the Obama administration due to concerns he could not win Senate confirmation because of opposition from key Republican senators to his pro-regulatory stance.
Quarles served in key financial positions at Treasury during the administrations of both Presidents George H.W. Bush and his son George W. Bush. Under the elder Bush, Quarles was a top adviser to Treasury Secretary Nicholas Brady from 1990 to early 1993, working on the team that developed a response to the savings and loan crisis that had hit in the 1980s.
During his second stint at Treasury from 2001 to 2006, Quarles held several positions, ultimately serving as Treasury's undersecretary for domestic finance. He was a key adviser to all three of Bush's Treasury secretaries, Paul O'Neil, John Snow and Henry Paulson.
In a 2015 interview on Bloomberg television, Quarles said that the Dodd-Frank Act was "in some ways a failure of ambition and in other ways a concession to inappropriate pressures."
In a Wall Street Journal op-ed that he co-wrote in March 2016, Quarles argued for a monetary policy rule to guide the central bank's interest rate decisions, a stance that is popular with many conservative Republicans. In that opinion piece, Quarles said that the Fed's low-rate policies had "led to a rise in speculative positions across a wide range of asset classes, as all financial institutions find themselves under intense pressures to seek adequate returns."
In addition to two other empty seats on the Fed board, Trump could have the chance next year to replace the top leadership of the Fed. Chair Janet Yellen's four-year term as Fed chair ends on Feb. 3, followed in June with the end of the term of Vice Chairman Stanley Fischer.
While Trump was harshly critical of Yellen during the campaign, he said in an April interview that he had not decided yet whether to replace her when her term as chairman is up next year.
Asked in the Wall Street Journal interview in April if Yellen was "toast" in terms of being re-nominated, Trump said, "No. Not toast. You know, I like her. I respect her. She's been here, she's been in that seat. I do like the low-interest rate policy."
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.