Trump pick for Fed board withdraws after GOP criticism

Former Federal Reserve Director Nellie Liang pulled her nomination to serve on the central bank’s board of governors amid opposition from Senate Republicans over her selection by President Trump.

Liang, an economist and former director of the Fed’s financial stability division, confirmed her decision, first reported by other outlets, in an email to The Hill on Tuesday, saying that “the likelihood of a prolonged process could have left me in professional limbo for too long.”

{mosads}“I have great respect for the Federal Reserve and its current leadership, and look forward to contributing as an outside researcher to the vital economic policy issues they face,” added Liang, a fellow at the Brookings Institute.

Trump nominated Liang to the Fed in September. Liang was the first director of the Fed’s division of financial stability. The division was opened in 2010 in the aftermath of the 2008 financial crisis to help reveal and mitigate risks to the financial sector.

Liang’s work on financial regulation endeared her to Democrats but drew skepticism from Republicans who want to loosen rules on banks and lenders. GOP senators griped about Liang’s nomination in public comments and private complaints to the administration.

Trump, his regulatory appointees and Republican lawmakers have chiseled away at the strict post-crisis banking rules enacted by then-President Obama in 2010. The president last May signed a bipartisan bill to loosen the restrictions imposed in the 2010 Dodd-Frank Wall Street reform law, and Trump-appointed financial regulators have taken aim at several Obama-era rules long targeted by the industry.

Republicans were wary of confirming Liang over fears she’d stifle several pending Fed proposals to loosen various capital, liquidity and oversight provisions.

Trump must now select a new nominee to fill one of two open spots on the Fed board of governors. The president nominated Marvin Goodfriend, a Carnegie Mellon professor, to the Fed board last year, but his confirmation appears doubtful.

Several Republicans have expressed opposition to his controversial monetary policy proposals, while Democrats have blasted Goodfriend for incorrect predictions of rampant inflation during the early 2010s.