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Fed's Quarles to recuse himself from Wells Fargo matters

15 December 2017 22:32 (UTC +04:00)

Randal Quarles, the top Federal Reserve official tasked with policing Wall Street, said on Friday that he would recuse himself from any matters concerning Wells Fargo & Co, the nation’s third largest bank, APA reports quoting Reuters.

Wells Fargo, which last year paid out $190 million in regulatory fines, is currently under investigation by two other financial agencies over whether the bank charged its customers too much for auto insurance and mortgages, Reuters has reported.

Quarles, who joined the Fed on October 13, said in a memo that he and his family had sold their financial interests in Wells Fargo, and repaid a business loan to the bank, prior to him taking up the role - meaning he was legally allowed to oversee the lender.

But the former Wall Street lawyer and private equity investor said he aimed to eliminate any perception of a conflict of interest by bowing out from all Fed decisions on the bank.

“I have made this decision in order to avoid even the appearance of a conflict,” Quarles wrote in a letter to the Fed’s chief counsel Mark Van Der Weide.

In September, the New York Federal Reserve faulted its president William Dudley for not disclosing that his sister-in-law worked for Wells Fargo.

Quarles is regarded as the country’s top banking regulator and will be a critical voice as the central bank and the country’s other banking regulators rethink how they approach bank supervision.

Conflicts of interest have long been a point of contention between those who argue regulators benefit from hiring people with real-world experience, and critics who say the revolving door makes it impossible to regulate effectively.

That debate has heightened under U.S. President Donald Trump, who has stocked his administration with former business executives, and pledged to slash regulations.