Washington DC
13 February 2017
Reporter: Drew Nicol
War for Wall Street heats up with Tarullo resignation
US Federal Reserve governor and key architect of post-crisis US banking regulation Daniel Tarullo has tendered his resignation, effective 5 April.

Tarullo was instrumental in the creation of rules framework set by the embattled Dodd-Frank Act, and his resignation offers an opportunity for President Donald Trump to further his campaign promise for an overhaul of banking regulation by allowing a potential roadblock to reform to be replaced with a successor with views more in line with the White House.

President Barack Obama appointed Tarullo to the board in January 2009 for an unexpired term ending 31 January 2022.

Tarullo served as chair of the board's committee on supervision and regulation and was also chair of the Financial Stability Board's standing committee on supervisory and regulatory cooperation.

In his two-line resignation letter addressed to the president, Tarullo declined to offer a reason for his early departure.

Tarullo’s resignation marks the latest in swathe of Obama-era senior regulators standing down under the new administration, including Securities and Exchange Commission chair Mary Jo White, who vacated her position after four years on the day of Trump’s inauguration.

The loss of another experienced figure at the central bank will be seen as a win for Wall Street, which had been a vocal critic of Tarullo’s strict standard setting as part of his interpretation of Dodd-Frank, as well as the newly energised anti-regulation wing of the Republican party.

The groundwork for an extensive roll-back of post-crisis regulation has already been laid in the opening weeks of Trump’s administration by way of signed executive orders giving the Treasury broad powers to scrap rules that do not comply with the administration’s loosely defined ‘core principles’.

Part of the core principles are defined as enabling “American companies to be competitive with foreign firms in domestic and foreign markets” and “advance American interests in international financial regulatory negotiations and meetings”.

The executive order stipulates that the Treasury shall consult with the Financial Stability Oversight Council and report periodically to the president “on the extent to which existing laws, treaties, regulations, guidance, reporting and recordkeeping requirements, and other government policies promote the core principles”, and identify any that “inhibit” these core principles. It is largely thought that this means Dodd-Frank.

Federal Reserve chair Janet Yellen said: "Daniel Tarullo led the Fed's work to craft a new framework for ensuring the safety and soundness of our financial system following the financial crisis and made invaluable contributions across the entire range of the Fed's responsibilities."

"My colleagues and I will truly miss his deep expertise, impeccable judgment, wise insight, and strategic counsel."

More Industry news
The latest news from Asset Servicing Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Northern Trust: Investors are taking transparency seriously
20 June 2017 | Chicago | Reporter: Stephanie Palmer
Transparency is an increasingly important factor when considering investment into both traditional and alternative assets
Clearstream’s ETF assets surpass €300 billion
20 June 2017 | Frankfurt | Reporter: Stephanie Palmer
Clearstream has seen a 25 percent increase in its custody business for exchange-traded funds over the last 12 months, with ETF assets under custody passing the €300 billion mark for the first time in May
Middle-office outsourcing may be set to increase among institutional investors in Asia, according to a survey conducted by Northern Trust
SIX launches new SSI tool
19 June 2017 | Zurich | Reporter: Drew Nicol
SIX Securities Services has launched an advanced settlement service to enable financial institutions to process their settlement instructions directly from the trading system
Fintech providers Misys and D+H to merge
15 June 2017 | London | Reporter: Drew Nicol
Technology providers Misys and D+H are joining forces to bring their combined fintech power to bear as a single global financial software provider
Northern Trust commits to Ireland
12 June 2017 | Limerick | Reporter: Drew Nicol
Northern Trust has committed to expanding its operations in Ireland with the addition of 400 new roles over the next five years
BNP Paribas: ESG investment seeing increased interest
25 May 2017 | London | Reporter: Stephanie Palmer
The survey report noted that 77 percent of asset owners already incorporate ESG aspects into their strategies
More Industry news