The Trump administration's apprehension about global trade and international agreements poses a dilemma for advocates of cross-border regulatory standards. Should standards setters shift their focus away from Washington, or take more strident steps to keep the U.S. in the fold?
It is hard to say whether the Financial Stability Board was aiming for the latter last month when it named the Federal Reserve Board's top regulator, Randal Quarles, as chairman. Yet observers say the appointment of Quarles, who took the reins of the FSB over the weekend, has the side benefit of bolstering the standards setter's relevance.
“It’s probably a good idea to have the key guy in the United States … to have a permanent seat at the table. It’s much less likely we’re going to pull out,” said Richard Herring, a finance professor at the University of Pennsylvania's Wharton School of Business.
Quarles, the Fed's vice chairman of supervision, assumed the position atop the body organized by the G20 nations despite concerns about recent flirtations with isolationism in the U.S., which has caused some to question Uncle Sam's role in crafting international rules.
The process by which the FSB chooses its leadership decisions is opaque; leaders of member states have been mum about why Quarles was picked.
Read more in American Banker.