Daniel Tarullo

Nomura Professor of International Financial Regulatory Practice

Areeda 335

617-998-1702

Assistant: Julia Cunha / 617-496-5392

Biography

Daniel K. Tarullo served as a member of the Federal Reserve Board and the Federal Open Market Committee from January 2009 to April 2017. As oversight governor for supervision and regulation, he led the Board’s financial regulatory reforms, including implementation of the Dodd-Frank Act, and revamped the Federal Reserve’s approach to the supervision of systemically important financial institutions. He was the Federal Reserve’s representative to the international Financial Stability Board, including four years as chair of its Committee on Supervision and Regulation. From 2015 to 2017 he was also Chair of the interagency Federal Financial Institutions Examination Council. In his monetary policy-making role on the Federal Open Market Committee, he often focused on developments in labor markets and on the relationship between monetary policy and financial stability.

Tarullo had extensive government and academic experience prior to his nomination to the Federal Reserve. From 1993 to 1998, he served, successively, as Assistant Secretary of State for Economic and Business affairs, Deputy Assistant to the President for Economic Policy, and Assistant to the President for International Economic Policy. He was a principal on both the National Economic Council and the National Security Council. From 1995 to 1998, Tarullo was also President Bill Clinton’s personal representative (sherpa) to the G7 group of industrialized nations. Immediately before joining the Clinton administration, he served as Chief Employment Counsel on the staff of Senator Edward M. Kennedy, and practiced law in Washington, D.C. He had previously worked in the Antitrust Division of the Department of Justice and as special assistant to the Undersecretary of Commerce.

Between periods of government service, Tarullo taught for fifteen years at Georgetown and Harvard law schools. He was also a visiting professor at Princeton and at the University of Basel. His scholarship ranged widely over the areas of financial regulation, international economic relations, international trade, and antitrust. His book Banking on Basel warned of risks being created by the changes in financial regulation that were put in place in the decade preceding the crisis.

Since stepping down from the Federal Reserve in April, Tarullo has been Distinguished Visiting Fellow at MIT’s Sloan School of Management and a Visiting Scholar at the International Monetary Fund.

Areas of Interest

Daniel Tarullo, Time-Varying Measures in Financial Regulation, 83 Law & Contemp. Probs. (forthcoming 2020).
Categories:
Banking & Finance
Sub-Categories:
Financial Markets & Institutions
,
Risk Regulation
,
Banking
Type: Article
Abstract
The financial crisis considerably strengthened the case for a “macro-prudential” component in financial regulation – that is, regulatory measures developed and implemented with a view to the stability of the financial system as a whole, rather than with sole attention to the circumstances of individual financial firms. Of particular conceptual appeal are time-varying measures that would discourage the creation of excessive risk, or at least augment the resiliency of firms and markets that could suffer greater losses in periods of economic or financial stress. Unfortunately, the analytic, political and practical hurdles to imposing effective time-varying measures during good times – whether through rules or discretionary action – are substantial. And, during periods of stress, market forces may demand that firms maintain fortress balance sheets, thereby thwarting the macro-prudential aim of allowing those firms to support economic activity through new lending that reduces capital levels and draws down liquidity reserves. This short paper examines these challenges through two examples – counter-cyclical capital requirements and the liquidity coverage ratio. It also suggests an approach that might begin to overcome these challenges, tough only partially and only for macro-prudential measures that increase regulatory requirements. The problem of market constraints on macro-prudential relaxation of requirements remains a problem.
Daniel K. Tarullo, Financial Regulation: Still Unsettled a Decade after the Crisis, 33 J. Econ. Persp. 61 (2019).
Categories:
Banking & Finance
Sub-Categories:
Banking
,
Commercial Law
,
Financial Markets & Institutions
,
Financial Reform
,
Risk Regulation
,
Economics
Type: Article
Abstract
A decade after the darkest moments of the financial crisis, both the US financial system and the legal framework for its regulation are still in flux. The post-crisis regulatory framework has made systemically important banks much more resilient. They are substantially better capitalized and less dependent on runnable short-term funding. But the current regulatory framework does not deal effectively with threats to financial stability outside the perimeter of regulated banking organizations, notably from forms of shadow banking. Moreover, with the political tide having for the moment turned decisively toward deregulation, there is some question whether the resiliency improvements of the largest banks will be preserved. This article assesses the accomplishments, unfinished business, and outstanding issues in the post-crisis approach to prudential regulation.

Current Courses

Course Catalog View

Areeda 335

617-998-1702

Assistant: Julia Cunha / 617-496-5392