Ms. Brainard has been a major proponent of a more active Fed role in making sure the financial system is prepared for potential fallout from climate change. She gave a speech at the Fed’s first climate-focused conference in 2019 and has recently focused on the need for climate scenario analysis for banks, which would test how well they would hold up amid extreme weather events, sea level change and other climate-tied risks.
As the sole Democrat left at the Fed board in Washington after 2018, Ms. Brainard used her position to draw attention to efforts to chisel away at bank rules, a process that was being driven by Randal K. Quarles, the Fed’s vice chair for supervision, who is stepping down in December. In the process, she created a rare public disagreement at the consensus-driven central bank, dissenting from policy changes more than 20 times in 2019 and 2020.
Ms. Brainard often released detailed explanations of her dissents, laying out a road map of what changes were made and why they might be problematic. For instance, when the Fed streamlined its stress-test approach, she supported simplification in spirit — but disagreed with how it was done.
“Today’s rule gives a green light for large banks to reduce their capital buffers materially, at a time when payouts have already exceeded earnings for several years on average,” she said, publishing an analysis of how she came to that conclusion, one that Mr. Quarles disagreed with.
Her new position will not give her more direct say over financial regulation than she previously had — governors all have a single vote on regulatory decisions — but she and her record of dissents could be a resource for the new person coming into the vice chair for supervision job.
Senator Sherrod Brown, an Ohio Democrat and chairman of the Banking, Housing, and Urban Affairs Committee, said Ms. Brainard had “spent her life fighting for a stronger, fairer economy.”
“At this moment, when workers are finally starting to see more power in our economy, we need a vice chair who understands that our economic recovery must strengthen our communities and put workers first,” Mr. Brown said in a statement.