Treasury’s Miller, Who Led Volcker Rule Work, Stepping Down

Mary Miller, the U.S. Treasury Department official who led implementation of new financial regulations including the Volcker rule, is leaving the department in early September.

Miller, 58, has been the undersecretary for domestic finance since 2012 and was assistant secretary for financial markets for two years before that. A successor would have to be nominated by President Barack Obama and confirmed by the Senate.

Miller wasn’t planning to stay until Obama’s term ends in January 2017 and wanted to leave soon enough to give a successor more than two years in the job, according to a person with knowledge of the matter. She hasn’t decided what she will do next or whether it will be in the public or private sector, said the person, who requested anonymity to discuss personnel matters. The Treasury hasn’t named anyone to replace her on an interim basis when she leaves.

Miller has led the “department’s efforts to tackle some of the most difficult challenges facing our country,” Treasury Secretary Jacob J. Lew said in a statement today.

Lew also cited Miller’s role overseeing Treasury debt, especially when Congress has delayed raising the federal borrowing limit. The Treasury has been forced to use so-called extraordinary measures, or accounting maneuvers, four times in the past three years to ensure that the government has enough money to pay its bills.

Market Experience

Miller spent 26 years at Baltimore-based asset manager T. Rowe Price Group Inc. as director of fixed income, head of the municipal bond department and a portfolio manager.

She led a public conference last month at the Treasury on whether asset managers such as BlackRock Inc. and Fidelity Investments pose a potential threat to financial stability and should be designated systemically important by a council of U.S. regulators.

Miller often coordinated the work of regulators implementing the Dodd-Frank financial overhaul law since 2010. She led officials from five U.S. agencies on the Volcker rule, which is intended to limit risks from proprietary trading at banks. The rule named for former Federal Reserve Chairman Paul Volcker was completed in December after three years of negotiations.

In August 2011, Miller was at the center of a dispute in between the Obama administration and Standard & Poor’s over the firm’s first-ever downgrade of U.S. creditworthiness. Treasury officials found what they called a $2 trillion “basic math error” in S&P’s explanation.

Downgrade Dispute

She phoned S&P the evening of the announcement to complain that the justification for the downgrade was inconsistent with the firm’s own data. The ratings firm, citing the level of government debt and the contentious political climate in Washington, went ahead with the change even after Miller and other Treasury officials objected.

Following the downgrade, bonds rose and pushed Treasury yields down to records.

Miller also has been part of the Treasury’s efforts to revamp mortgage companies Fannie Mae and Freddie Mac. The companies, which buy mortgages and package them into bonds, were seized by regulators in 2008 as they neared bankruptcy. Taxpayers provided $187.5 billion in aid to keep the firms afloat.

As undersecretary, Miller has overseen work by the staff of the Financial Stability Oversight Council, a group of regulators led by Lew charged with preventing another financial crisis. The council, or FSOC, can designate non-bank firms systemically important and subject them to Fed oversight.

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