Fed’s Quarles defends key international regulatory body

By Michelle Price

WASHINGTON (Reuters) – A top U.S. Federal Reserve official on Wednesday defended a key international regulatory body, in a speech that could help boost his candidacy to lead the Switzerland-based Financial Stability Board (FSB).

The FSB was created in the wake of the 2007-2009 global financial crisis to help set international regulatory standards and is currently chaired by the Bank of England’s Mark Carney, whose tenure ends this year.

Randal Quarles, the Fed’s vice chairman for supervision, is one of a handful of candidates from central banks across the globe under consideration to replace Carney, according to a person with direct knowledge of the discussions.

But U.S. mistrust of multilateral organizations and the Trump administration’s rollback of financial rules could hamper Quarles’ chances getting the job, this person said on condition of anonymity.

Speaking at a gathering of community bankers in his home state of Utah, Quarles stressed the importance of the FSB in bolstering global financial stability by propagating strong regulatory standards that also help protect the U.S. system.

He added it was in the interests of the United States, which has historically driven a lot of the FSB’s standards, to continue to participate in the body.

“The United States is not weaker or less independent by participating in the FSB or other standard-setting bodies. On the contrary, when rightly structured our participation in these groups makes our financial system significantly stronger,” he added.

Some U.S. lawmakers have argued that the FSB is opaque and unaccountable and should not be allowed to impose its rules on the United States.

The FSB has said it will improve its transparency and has begun reviewing whether core rules put in place since the financial crisis need amending.

A spokesman for the FSB declined to comment on Wednesday.

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