FSB names Fed’s Quarles as next chairman

WASHINGTON — Federal Reserve Vice Chairman of Supervision Randal Quarles will succeed Bank of England Gov. Mark Carney as chairman of the Financial Stability Board, the international standards-setting body said Monday.

Quarles, who is set to take the post starting Dec. 2, praised Carney and the work of the FSB in a statement, saying the organization is vital to promoting international coordination and appropriate safeguards for the financial system.

“Under Mark’s leadership, the FSB has played a central coordinating role in building a resilient global financial system in the aftermath of the financial crisis,” Quarles said. “Ten years on, the FSB’s work remains just as relevant. With its broad membership, it is uniquely placed to promote resilience and preserve an open and integrated global financial system in the future.”

Joshua Roberts/Bloomberg

Carney said in the same release that he was proud of his work on the board and was confident that Quarles — along with Klaas Knott, president of the Dutch Central Bank, who will serve as vice chair — will further the board’s goals of international cooperation and financial stability. Carney began his term as chair of the newly formed Financial Stability Board in 2011, when he was governor of the Bank of Canada. He became Governor of the Bank of England in 2013 while continuing to serve as chair of the board.

“It has been an honor to serve these last seven years,” Carney said. “Randy and Klaas will provide strong leadership and continuity as the FSB pivots towards the implementation and evaluation of post-crisis reforms, and to addressing emerging vulnerabilities in the global financial system. Their appointment demonstrates the FSB’s unique role as a member-led, international body for cooperation on global financial stability.”

The announcement comes amid reports early last week that Quarles had become the front-runner for the job, a part-time position with a three-year term. The Financial Stability Board, based in Basel, Switzerland, is organized as an offshoot to the G-20 and a complement to the Basel Committee on Banking Supervision, which is also based in Basel.

There had been rumors that Quarles was gunning for the job as early as March, and in his appearances before Congress and in a speech in June he took pains to defend the value of international forums such as the stability board against criticisms — often originating from members of his Republican party — that they usurp U.S. sovereignty in rule-setting.

“The United States is not weaker or less independent by participating in the FSB or other standard-setting bodies,” Quarles said in his June speech. “On the contrary, when rightly structured our participation in these groups makes our financial system significantly stronger by ensuring that the U.S. perspective is part of the discussions and reflected in standards agreed to. Our consumers and businesses are more secure and prosperous because the FSB helps make sure that all countries are doing their share in promoting financial stability and not gaining an unfair advantage.”

Quarles’ ascent to lead the Financial Stability Board was not inevitable. Carney was asked to extend his chairmanship for an additional year in part to allow time to find a suitable successor. Quarles’ name was forwarded early in the process, but there was widespread speculation that the U.S. trade positions and the isolationist tendencies of the Trump administration had hurt his chances of being named to lead an international standard-setting body.