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Published: Sat, February 11, 2017
Economy | By Melissa Porter

Fed board member Daniel Tarullo announces resignation


Tarullo, 64, a central bank governor since 2009, oversaw the Fed's annual stress tests, set up in the aftermath of the 2008 financial crisis to ensure banks big enough to threaten the USA economy if they failed could withstand severe downturns.

Privately, Tarullo was feared and criticized by many bankers, who grew frustrated when the Fed blocked dividends and stock buybacks because of unclear "qualitative objections" to their risk management plans. He was also chairman of the Financial Stability Board's standing committee on supervisory and regulatory cooperation.

In a brief letter sent to President Donald Trump, Tarullo said that he meant to resign on or around April 5.

Daniel Tarullo, who helped enforce banking rules in the wake of the global financial crisis, will leave the central bank April 5, almost five years before his term expires. His term was set to expire in 2022. He earned a reputation as one of the toughest supervisors of banking.

With Turallo's departure, there are now three openings on the Federal Reserve's seven-member board.

Tarullo was a central figure for the Fed in crafting and implementing the Dodd-Frank financial reform law, and his departure makes clear that the Trump administration will soon dictate the direction of regulation at the agency going forward.

There are now two vacancies on the Fed board because Congress refused to confirm two nominees of former President Barack Obama. His time on the Fed board was marked by one of the busiest periods in the central bank's history, with massive demands from the 2010 Dodd-Frank Act to overhaul the USA financial system in an effort to prevent a repeat of the 2008 meltdown.

That said, the 2017 rotation of Fed presidents is move on the dovish side.

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