012: Randy Quarles| banking the economy

NOTE| This episode is longer than usual--> ‘Top of The Game (in) Overtime’ are released occasionally.

RANDY’S BIO

Randy knows more about finance, banking, private equity, fintech, and economic policy than just about everyone in the world. This talk is a master class that touches on all of these subjects, especially the changing role of banks in the world economy and its intersection with technology.. He is a private equity investor and past practicing attorney who served as the first ever Vice Chair of the Federal Reserve for supervision from 2017 to 2021 under Presidents Trump and Biden. Randy also concurrently served as the chair of the Financial Stability Board from 2018 to 2021.

He has held several consequential financial policy posts over his career, including during the George W. Bush administration when he ultimately served as Under Secretary of the Treasury for Domestic Finance. After leaving the Bush administration, he became the founder and head of The Cynosure Group, a private investment firm, preceded by being a managing director of The Carlyle Group, one of the world's largest private equity firms.

Since the early 2010’s he has been widely mentioned as a possible Treasury Secretary or senior White House adviser in Republican administrations. His extensive financial policy experience started in the early 1990’s serving as Deputy Assistant Secretary for Financial Institutions Policy during the George H.W. Bush administration under the thenSecretary of Treasury, Nicholas Brady.

Early in his career and after receiving his law degree from Yale, Quarles worked Wall Street law firm of Davis Polk & Wardwell where he specialized in financial institutions law, eventually becoming co-head of the firm's Financial Institutions Group and advising on transactions that included a number of the largest financial sector mergers ever completed.

“Dodd-Frank's intent was not to avoid bank failures, it was designed so that any bank could fail and not become systemic... we tested this earlier this year.”

EPISODE OUTLINE

(0:00) - Intro

(0:38) - Background

(01:36) - The early years

(02:47) - Lessons that stick; young lawyer sticking to his guns, difficult, scary

(06:42) - Financial policy at the highest level; conviction, seeking input, synthesizing

(09:11) - Top bank supervisor in America; tradeoffs--> tech, safety, the real economy

(13:30) - Bank failures in 2023; safeguards, speed, liquidity--> $140 billion<24 hrs

(18:00) - Original purpose of the Fed at the root

(19:16) - Decision making with trillions at stake; monetary policy, governance, trust

(24:15) - Bridging left and right, doable, needed

(24:55) - Outro

RANDY RELATED LINKS

Randy’s Wikipedia

What Congress Should Ask Regulators after SVB Collapse: WSJ OpEd

The Federalist Society

Departing Thoughts: Federal Reserve Board

The Cynosure Group

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