“Mr. Quarles spent his tenure as a top financial regulator in the United States weakening safeguards for megabanks at the expense of financial stability and the American public,” said Warren, a former U.S. presidential hopeful who is the most senior Democrat on the Senate banking committee.
“It would be deeply troubling if this FSB review became a mechanism to coordinate the easing of post-2008 rules across the globe.”
She said Quarles’ background “demonstrates that he is the wrong person to lead such a review.” She called on Bailey to “consider terminating the appointment and conduct your own search for a suitable replacement.” Bailey, who is governor of the Bank of England, became FSB chair after Quarles’ appointment.
The warning came as the FSB, a global body that monitors and coordinates national financial regulations, issued new guidance on the regulation of nonbank financial groups, such as hedge funds. The guidance recommended capping the amount of borrowing these groups can do, but left up to national regulators to determine the details.
Rolling back safeguards
In the years following the 2008 global financial crisis, countries clubbed together and tasked the FSB with coordinating national regulators to prevent a similar crisis happening again.
But in 2017, with momentum shifting back to deregulation, newly-elected U.S. president Donald Trump nominated Quarles to head up the Fed’s banking supervision arm.
