Banking

Biden’s tough choice on who will lead Treasury

WASHINGTON — President-elect Joe Biden will inherit a very uncertain economy on Jan. 20. It remains to be seen whether Congress can agree on a stimulus package during the lame duck period, and how an almost certain second wave of COVID-19 cases will affect jobs, business closures, consumer spending and financial stability.

Biden’s Treasury secretary, which he is expected to name in the coming weeks, will be tasked with presiding over a U.S. economy that has not only been ravaged by the pandemic, but is facing new reckonings over racial inequality and climate change. The Treasury chief is also the incoming cabinet’s primary financial policymaker, with influence over bank regulatory changes, reforming the housing finance system, and what legislation affecting banks gets the administration’s support.

But with the control of the Senate still up in the air until two Senate races in Georgia are decided by January runoffs, Biden will likely be forced to select a Treasury secretary that could be approved by a Republican-controlled chamber.

Plus, if Republicans retain control of the Senate, Biden may have to select someone able to negotiate a sweeping economic stimulus package with Senate Majority Leader Mitch McConnell. That could mean compromising some components that Democrats had hoped would pass easily if the election produced a Democratic majority in the Senate.

The Senate factor almost certainly means that some of the more progressive names that had been floated before the election for Treasury secretary, like Sen. Elizabeth Warren, D-Mass., or former Labor Secretary Robert Reich, are non-starters. But it’s not completely out of the realm of possibility that Biden would choose a more left-of-center candidate to appease the progressive side of his party.

Still, Biden’s Treasury secretary will have far-reaching influence over banking policy, from heading the Financial Stability Oversight Council to working with the Fed to finance emergency lending facilities.

The president-elect’s transition team provided a glimpse of how the selection process could take shape when it released a list of volunteers and paid employees advising the incoming administration on key appointees. Leading the Treasury Department review team is Don Graves, an executive at KeyBank.

Here are some of the candidates to lead the Treasury Department under Biden:


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