TD Cowen: Barr's resignation is not a victory for big banks, and regulatory deregulation may not make much progress this year

Jaret Seiberg of TD Cowen Washington Research Group said the resignation of Barr, the Fed's vice chairman for supervision, "is not as much of a win for big banks as it may appear." "Democrats will retain their majority on the Federal Reserve until early 2026, and given the need to confirm new regulators, it's hard to see much progress being made on deregulation this year," Seiberg said in a report Monday. Barr has called for regulation of stablecoins over the past year, saying stablecoins "borrow on the trust of the central bank." "... The Fed is very interested in ensuring that any stablecoin issuance operates within an appropriate federal prudential regulatory framework so that they do not threaten financial stability or the integrity of the payment system," Barr said at a conference in Washington, D.C., in October 2023. For years, lawmakers have been working on bills to regulate stablecoins, but the sticking point has been how to divide regulatory authority between state and federal. (The Block) Yesterday, Fed Chairman Barr announced that he would resign as Vice Chairman of Supervision on February 28, 2025. The Fed stated that Barr would continue to serve as a member of the Fed Board, but did not intend to participate in major rule-making work until the successor to the vice chairman position was determined. Fed Chairman Barr said in the statement that the risk of "controversy" about his position could distract the Fed's attention.