Biden Offers Fed Veteran Nellie Liang Top Post at Treasury

President Joe Biden is offering Nellie Liang, a veteran of the Federal Reserve and expert in financial regulation, a top role at the Treasury Department, according to people familiar with the matter.

Liang, who worked at the Fed with then-central bank chief Janet Yellen -- who’s set to become Treasury secretary -- was offered the job of undersecretary for domestic finance at the agency, the people said, speaking on the condition of anonymity.

White House and Treasury spokespeople did not reply to a request for comment.

The job involves not only keeping tabs on the stability of the U.S. financial system but overseeing management of the $21 trillion Treasuries market, including issuance strategy. Debt sales have surged amid record spending to combat the coronavirus.

Biden Offers Fed Veteran Nellie Liang Top Post at Treasury

Yellen is building a team that will step into an economic crisis that has left nearly 11 million Americans unemployed. Parts of the economy have shut down over the past 10 months to stem the spread of the deadly coronavirus, which has so far killed more than 400,000 in the U.S.

During her confirmation hearing, Yellen defended Biden’s pitch to spend another $1.9 trillion to combat the economic crisis, saying that now is not the time to worry about the budget deficit. She said she would undertake another review of potential investor appetite for 50-year bonds. The longest-maturity Treasury the department now issues is the 30-year bond.

If confirmed by the Senate, Liang would oversee that review. The first potential hint of any shift in debt issuance strategy could come in the department’s so-called quarterly refunding announcement, where it lays out tactics for its sales of Treasuries. That’s scheduled for Feb. 3.

Liang would also oversee any reforms in the structure of the Treasuries market in the wake of the severe trading disruptions that surfaced in March, when the pandemic first hit.

The market was close to disaster when bond liquidity vanished as investors panicked about the pandemic and stopped trading, forcing the central bank to pick up the slack and buy debt at an unprecedented speed to restore market functioning.

Market Overhaul

Liang, in remarks on a panel at a September conference hosted by the New York Fed, said that policy makers should be thinking about changes to prevent it from happening again.

Liang would take a position that has been vacant since 2014, with the job undertaken by counselors to then-Treasury Secretaries Jacob Lew and Steven Mnuchin. Counselors don’t require Senate confirmation.

Liang is a senior fellow at the Brookings Institution, and led a division at the central bank in charge of financial stability policy and research for six years. She at the time worked to implement provisions of the 2010 Dodd-Frank Act and other rules aimed at making the financial system safer.

Former President Donald Trump nominated Liang to the Fed’s Board of Governors in 2018, but she withdrew from consideration in 2019 after failing to get support from Republican lawmakers.

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