Chief economic adviser Gary Cohn said the White House has a candidate to fulfill the community banking-designated spot on the Federal Reserve Board.
Speaking Oct. 16 at the American Bankers Association's annual convention, Cohn said the administration has selected a candidate who is currently undergoing vetting by the Federal Bureau of Investigation. Cohn said the administration selects candidates based on their skills, talent and knowledge base without dinging any candidates for previous banking experience.
Cohn was also enthusiastic about President Donald Trump's other pick for the Federal Reserve, Randal Quarles, who was recently confirmed. Cohn said he expects Quarles to make an immediate impact as the administration pursues a deregulatory agenda.
Cohn said the administration is continuing to push regulators toward supervising based on an institution's risk profile, calling the asset threshold system "crazy." Once a bank crosses $10 billion in assets, the regulatory supervision becomes much tighter.
Talking about the economy generally, Cohn said strong figures on job growth, wage growth and low unemployment show the U.S. economy is on solid footing. He said growth should only accelerate as the administration pursues tax reform and regulatory relief. However, Cohn said, the effort was being held up by Congress, particularly by a number of regulatory appointments that are awaiting confirmation.
"Can we get Congress to do their job? That's always a good question," Cohn said.
On potential headwinds and what keeps him up at night, Cohn tabbed cyber warfare as a top concern. Also, he said the next financial crisis would most likely be the result of something done in response to the last crisis. Specifically, he tabbed the use of central clearinghouses, saying that the financial system now puts $278 trillion worth of securities through central clearinghouses that lack a clear resolution plan.
"We haven't really figured out how to resolve the clearinghouse," Cohn said.