July 19, 2022
My guest today is Randal Quarles, Chairman of the Cynosure Group and previously the Federal Reserve Board’s Vice Chair for Supervision, a role in which he also chaired the US Financial Stability Board. He left the Fed at the end of last year, which makes this the perfect time to chat with him – I think it’s always extra-interesting to talk with government officials shortly after they leave office. In this conversation, he shares candid and thoughtful insights drawn from his tenure, including some advice for other policymakers. His thoughts are especially interesting because he served through the crisis of the COVID pandemic.
In our conversation, Governor Quarles talks about the challenges the Fed faced through that period, in terms of both overseeing the novel risks hitting the banking system and managing the huge credit facility that provided emergency COVID funding. On the latter, he has thoughts on the complex precedents it may have created, including some specific suggestions for Congress and the Fed going forward.
Needless to say, we also talk technology. He shares thoughts about the volatility underway in the fintech sector, including in digital assets. We talk about the role and regulation of stablecoins. We talk about central bank digital currency – CBDC – on which he’s a skeptic, with some very interesting arguments. We also talk about the acute challenge facing regulators in keeping pace with the technology change that is so profoundly transforming the markets they oversee.
Last but not least, he offers an extremely interesting analysis of the state of the economy, including his predictions on what’s ahead for us on inflation and recession.Our discussion is also timely because we recorded it in the same week that former Treasury Assistant Secretary Michael Barr was confirmed by the Senate to become the new Fed Vice Chair for Supervision. I know you will enjoy my conversation with Randal Quarles.
More on Randy
Randal Quarles is founder and executive chairman of The Cynosure Group, an investment firm bringing together several of the United States’ largest family offices to make long-term private investments.
From October of 2017 through December 2021, Mr. Quarles was Vice Chairman of the Federal Reserve System, serving as the system’s first Vice Chairman for Supervision, charged with ensuring stability of the financial sector. From December 2018 until December 2021, he also served as the Chairman of the Financial Stability Board, a global body established after the Great Financial Crisis to coordinate international efforts to enhance financial stability.
Earlier in his career, Mr. Quarles was a long-time partner at The Carlyle Group, a leading global private equity firm, and before that was a partner at Davis Polk & Wardwell, where he was co-head of the financial services practice. Mr. Quarles has been a close advisor to every Republican Treasury Secretary for the last 35 years, including as Under Secretary of the Treasury in the Bush ’43 Administration. He has represented the United States in the Group of Seven, Group of Twenty, and Financial Stability Forum, and was also US Executive Director of the IMF.
More for our Listeners
We have many great shows coming up in the second half of the year! Following up today’s episode, we’ll have a conversation with Sunayna Tuteja, the first-ever chief innovation officer of the Federal Reserve System. We’ll also talk with former Treasury Department official Jessica Renier, who is now at the IIF. We’ll have Circle CEO Jeremy Allaire back again, along with Tomicah Tomilson of Haun Ventures. I’m going to record a show in person with The RegTech Association’s CEO Deborah Young, who will be in the United States all the way from Australia. We’ll talk with the fascinating innovation team from the MSRB – the Municipal Securities Rulemaking Board. And we’re going to talk with the one and only Simon Taylor, on all things crypto and defi.
I cannot believe it is already the middle of July! I just spoke at the National Fair Housing Alliance conference, and in August I will be on my way to Aspen for the Moonclave conference, which will be tackling the most interesting issues in crypto. In September I’ll be back at Compliance.ai. And we’ll of course be at Money 20/20 in the fall.
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