The Fed: Unlike Yellen, rumored new Fed bank supervision chief supports rule-based interest rates

The rumored nominee to take the Federal Reserve’s vice chairman of supervision role, Randal Quarles, is best defined in his own words.

Read:Randal Quarles said to be tapped for top Fed regulatory post

A March 2016 op-ed in The Wall Street Journal he co-wrote states plainly what he thinks of the idea that banks are too big to fail: “Focusing on bank size is politically appealing but diverts attention from the major source of systemic risk in the financial sector: a shortage of stable deposits.”

But one of his solutions also gives a clue as to where he stands on monetary policy: “adopt a monetary policy rule, such as the Taylor rule, that would normalize interest rates and reduce the incentive for big banks and even smaller institutions to take dangerous risks.

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