(Adds Nason statement and details throughout, changes headline)
By Pete Schroeder and Olivia Oran
March 8 David Nason, a General Electric
executive and former Treasury Department official, has told the
White House he is no longer interested in serving as the Federal
Reserve's bank supervision chief.
Nason, who heads GE's Energy Financial Services division,
had been seen as a leading candidate for the vice chair for
supervision position, a critical role in efforts by the
administration of President Donald Trump to revamp financial
"Mr. Nason informed the White House that he no longer wished
to be considered for the position of Vice Chairman at the
Federal Reserve. He plans to pursue opportunities at GE," the
company said in a statement on Wednesday.
Nason's withdrawal, first reported by Bloomberg, injects new
uncertainty into one of the most closely watched financial
openings in Washington. The supervision chief is the most senior
rule-writer for Wall Street and has a large say in how leading
banks are supervised day to day.
Jaret Seiberg, a policy analyst at investment banking and
research firm Cowen Group, said Nason's departure is "worrisome"
for large banks, as it suggests a "pragmatist" open to providing
relief to bigger institutions will not fill the position.
"National Economic Council Director Gary Cohn was unable to
get the President to pull trigger and nominate Nason," wrote
Seiberg. "If Cohn cannot get a pragmatist into that job, then
there is a real risk of an ideologue."
"This could be seen as a victory for the Trumpista wing of
the administration and the more hardline segment of the
Republican Party," wrote Ian Katz, a financial policy analyst
for research firm Capital Alpha Partners, in a note to clients.
In 2008, Nason was a deputy to Treasury Secretary Henry
Paulson as U.S. regulators tried to stabilize Wall Street and
prevent an economic meltdown after the housing market collapsed.
While Nason was the leading contender for the role,
congressional Republicans became increasingly unhappy with the
idea over the past week or so, sources said. Conservative
lawmakers took issue with Nason’s involvement as a Treasury
Department official in the post-financial crisis bank bailout
program, as well as with his voicing of support for the
Dodd-Frank financial reform law that came in response to the
2008 financial crisis, they said.
Harvard Law School professor Hal Scott, whose work has
focused on financial firms, regulation and capital markets, is
still in the mix for the job, a person familiar with the matter
told Reuters. Scott is director of the Committee on Capital
Markets Regulation, a research group made up of financial
industry representatives and academics that has been critical
of financial regulations.
Some regional banks are also pushing for French Hill, a
Republican Congressman from Arkansas who has community banking
experience. However, a spokesman for Hill suggested Wednesday he
is not interested in the role.
Other names that have been floated for the role include
Richard Davis, the chief executive officer of U.S. Bancorp
, former BB&T Corp Chairman John Allison, and Tom
Hoenig, vice chairman of the Federal Deposit Insurance
The position was created by the Dodd-Frank Wall Street
reform law after the 2007-09 financial crisis. Though it was
never filled, Daniel Tarullo, who announced his resignation in
February as Fed governor, took on much of its responsibilities.
When Tarullo leaves the U.S. central bank, on or around
April 5, Trump will have three spots on the seven-member Fed
Board of Governors he could fill with nominees.
Tarullo's resignation is seen as boosting Trump's plans to
ease reforms put in place after the financial crisis.
(Reporting by Pete Schroeder in Washington, Olivia Oran in New
York and Arunima Banerjee in Bengaluru,; Editing by Anil D'Silva
and Tom Brown)