The US Federal Reserve's top banking regulator has announced his early resignation, avoiding a confrontation with President-elect Donald Trump who can now pick his replacement.
Michael Barr, the Fed's vice chair for banking supervision, said in a statement that he will step down from his management role by 28th February at the latest - around 18 months before his term was set to expire in July 2026.
Mr Barr, who was nominated by outgoing Democratic President Joe Biden, said he will remain as a Federal Reserve governor, a role that gives him a permanent vote on the US central bank's powerful interest rate-setting committee.
That decision means Trump will have to pick his replacement from among the Fed's current seven-strong board of governors -- unless one of them chooses to voluntarily resign before their term expires.
"The risk of a dispute over the position could be a distraction from our mission," Mr Barr wrote in a letter to President Biden announcing his resignation, which the Fed shared with reporters.
"In the current environment, I've determined that I would be more effective in serving the American people from my role as governor," he added.
Mr Barr is only the second person to serve as Fed vice chair for supervision, a role created in the aftermath of the Global Financial Crisis.
His resignation paves the way for Mr Trump to replace him with someone more in tune with his own views on banking regulation.
His successor must be officially nominated by Mr Trump after he takes office on 20th January, and then confirmed by the Republican-controlled US Senate.
Whoever fills the post will likely favor a lighter touch when it comes to banking regulation and supervision.
"Michael Barr has failed to meet the responsibilities of his position," said Tim Scott, the most senior Republican on the Senate Banking Committee.
"I stand ready to work with President Trump to ensure we have responsible financial regulators at the helm," added Mr Scott in a statement posted to the official X account for the Republicans on the committee.
Mr Barr's biggest public critic from within the Fed has been Michelle Bowman, a Trump-nominated governor who has consistently opposed attempts at enacting tougher banking regulation.
