President Barack Obama is considering Federal Reserve Governor Sarah Bloom Raskin, a former state banking regulator, to serve as deputy Treasury Secretary, according to two people familiar with the matter.
Raskin, 52, emerged as a leading candidate after Obama administration officials concluded that they wouldn’t be able to persuade the Senate to confirm anyone with a long career on Wall Street, according to the people, who asked not to be identified. While Raskin was a managing director at Promontory Financial Group, which advises banks, she joined the Fed after serving as Maryland’s top financial regulator from 2007 to 2010.
Her potential departure would create a second opening on the Fed’s board. Governor Elizabeth Duke, who also focused on regulation, announced July 11 that she would be leaving the central bank at the end of August. In addition, Fed Chairman Ben S. Bernanke’s term ends early next year, and the White House has begun looking for a successor.
Obama and Treasury Secretary Jack Lew are seeking a candidate with expertise in financial markets to balance Lew’s shortage of experience outside of Washington.
While Lew worked for Citigroup Inc. for two years, he spent most of his career in government before joining the Obama administration, first on Capitol Hill and then as an official in the Clinton White House.
Earlier this year, Ruth Porat, chief financial officer at Morgan Stanley (MS), had been the leading candidate for the No. 2 position at Treasury until she informed the White House in March that she was no longer interested in the position.
Raskin, if nominated by the president and confirmed by the Senate, would succeed Neal Wolin as deputy Treasury secretary. Wolin is leaving that post next month, according to a Treasury official who asked not to be identified because a formal announcement hasn’t been made.
Appointed by Obama in 2009, Wolin has defended tighter financial regulation as necessary in the aftermath of the 2008 credit crisis. He was a key negotiator with Congress on the Dodd-Frank financial overhaul that was signed into law in 2010.
Raskin joined the Fed board in October 2010 to fill an unexpired term that lasts through January of 2016. On the board, Raskin has focused on regulatory issues and served on a subcommittee that examined how the Fed’s new supervisory tools were affecting community banks.
Some of her speeches on regulation have been critical of Wall Street banks. In her first address as a Fed governor, she spoke at a mortgage conference in Park City, Utah, and told the crowd that mortgage companies and investors needed to look past their own profits.
“The government can only do so much, and relevant private sector actors need to think beyond their bottom line and focus on how their firms’ actions are or are not contributing to the economic recovery,” Raskin said.
In February, during a speech at an Atlanta Fed conference, she called on banks to think more about their reputations.
“The causes of the crisis and the subsequent devastation are myriad, but to large swaths of the American public who have experienced the devastation, the causes rest squarely on the shoulders of financial institutions, especially the largest institutions,” Raskin said.