To avoid potential conflicts with the Trump administration, the vice chair responsible for bank supervision at the Federal Reserve resigns.

The vice chairman responsible for bank regulation at the Federal Reserve, Michael Barr, will resign from his position on February 28, clearing the way for President-elect Trump to appoint a successor and avoiding potential conflicts between the two. Although Barr will step down from his role as vice chairman for regulation, he will continue serving as a Federal Reserve Governor, with his term lasting until 2026. The decision for Barr's resignation has sparked speculation that Trump may try to replace him after taking office on January 20, a move seen as helping to ease tensions during this transition period. In his statement, Barr did not explicitly mention the rumors about Trump's plans to replace him, but stated, "Controversy surrounding this position could distract from our mission. In the current environment, I believe continuing to serve in a Governor role will better serve the American people." He added, "It has been my honor and privilege to serve as Vice Chairman (Regulation) of the Federal Reserve, working with colleagues to maintain the stability and strength of the American financial system to meet the needs of American families and businesses." Following the announcement, bank stocks generally rose, with the SPDR S&P Bank ETF, tracking leading banks, rising more than 1%. The Federal Reserve stated that no major decisions on rules and regulations will be made until the new vice chairman takes office. Currently, the banking industry is undergoing revisions of a set of new rules known as the Basel Endgame, which has been controversial within the industry. With the Federal Reserve Board limited to 7 members, Trump will need to select a replacement from current members to fill the position. The position of vice chairman for regulation was established after the 2008 financial crisis, when several large financial institutions on Wall Street collapsed. During Barr's term, the banking industry experienced a crisis in early 2023, with several banks, including Silicon Valley Bank, collapsing, prompting the Federal Reserve to establish liquidity tools to prevent the crisis from spreading. Recently, rumors about Trump potentially forcing Barr to resign have been circulating. According to a Reuters report from December 2023, Barr had sought legal advice regarding Trump's possible actions. Trump's team has not yet commented on this news.