FDIC’s No. 2 tapped for top spot

{mosads}If confirmed, Gruenberg would take the helm of a regulator that is overseeing significantly broadened powers thanks to the Dodd-Frank financial reform law.

That overhaul gave the FDIC the ability to wind down ailing financial institutions, and the FDIC has co-written rules with the Federal Reserve that would establish “living wills” for firms, which would lay out the blueprints for their dismantling in the event of a collapse.

It also has approved proposed rules that would require financial firms to retain some of the risk created by securities backed by mortgages.

Gruenberg also has extensive experience on Capitol Hill, serving as senior counsel to Sen. Paul Sarbanes (D-Md.) on the staff of the Senate Banking Committee from 1993 to 2005.

Following the announcement, Senate Banking Committee Chairman Tim Johnson (D-S.D.) lauded Gruenberg for his “excellent work,” and pointed out that he has already cleared the hurdle of Senate confirmation in 2005 when he first joined the regulator.

He added that he intended to move Gruenberg’s nomination “as quickly as possible.”

“I am confident that his intellect and years of experience in financial services, including distinguished service on the staff of the Senate Banking Committee, will make him an outstanding chairman,” he said in a statement. “It is vital that we have strong leaders in place at our financial regulators as we continue the economic recovery.”

Gruenberg had long been suspected to be a likely candidate to replace Bair. His spot at the top of the list had previously been reported in April, and Rep. Barney Frank (D-Mass.) told The Hill he would be the logical choice.