Low-key regulator in line to take on Wall St titans

The current No. 2 man at the Federal Deposit Insurance Corp -- and a strong contender to take over from Chairman Sheila Bair in the coming months -- speaks at a volume just north of a whisper at FDIC board meetings.

Those who have worked with him say Gruenberg is quiet behind the scenes as well. They warn, however, not to mistake his low-key style for a lack of strong beliefs, which include a firm approach to reining in risky bank practices.

His style is softer but he can be quite fierce when he wants to be, said John Dugan, who served with Gruenberg on the FDIC board when he was Comptroller of the Currency from 2005 through 2010.

This quiet assertiveness may soon be put to the test, with the FDIC going toe-to-toe with brash Wall Street figures as the agency reshapes banks' capital, redesigns their pay packages, and forces them to write living wills that lay out how toppling firms may be dismantled by the government.

Gruenberg, 58, is a leading Democratic candidate to be nominated by President Barack Obama to head the FDIC when Republican Bair's term expires in June, according to industry and congressional sources.

If he doesn't get the nomination, he will likely serve as the acting chair until the Senate confirms Bair's replacement.

Gruenberg's muted style is a marked contrast from Bair, who has helmed the agency since 2006, navigating it through the financial crisis and the bailouts, calling out well-paid bankers and clashing with other regulators along the way.

Bair has said she wants to move on to non-profit work or back to the academic world.

WASHINGTON MAN

Gruenberg, who declined to be interviewed, is a native New Yorker and son of immigrants who attended high school in the Bronx before heading to Princeton. Colleagues say he is a die-hard Yankees fan.

Despite his New York roots, Gruenberg, has spent his career in Washington. Since the mid-1980s he has been grinding away on banking issues first as a top aide to one-time Senate Banking Committee Chairman Paul Sarbanes, a Democrat. He joined the FDIC in 2005 and between November 2005 and June 2006 he served as acting chairman, giving him a taste of running the agency.

People who have worked with Gruenberg in Congress and at the FDIC describe him as a wonk who digs into policy details and takes some time to form an opinion but rarely waivers from that point of view when me makes up his mind.

He's not a man of many words but when he does speak he makes it very clear what his position is, said Wayne Abernathy, a Republican who worked with Gruenberg on the banking committee and is now a top official at the American Bankers Association.

While Gruenberg's resume is rich with experience, his most desirable quality might be that he has a good chance of being confirmed -- a rarity in partisan Washington and a contrast to Elizabeth Warren, whose lack of congressional support has tripped up her chances to head the new consumer watchdog.

MAINTAINING BAIR'S LEGACY

Observers said they expect Gruenberg would keep the agency on the aggressive regulatory path Bair has charted and put a particular emphasis on consumer protections.

Gruenberg is likely to press for a strict implementation of Basel III, and he has been actively involved in Basel discussions since joining the FDIC, according to colleagues.

The subject is a touchy one among bank executives, and among international regulators who are not taking a consistent approach to capital levels. It will stifle economic growth and I already believe it is, JPMorgan CEO Jamie Dimon said earlier this month about the Basel III framework.

While Bair's flash was advantageous during the bailouts and the writing of Dodd-Frank, Gruenberg may do well taking a strong but diplomatic approach behind the scenes with financial firms. There is no wish-washy. You know where he is coming from and why, said Mitchell Glassman, a longtime senior FDIC official who left the agency in December and now works for Deloitte Consulting LLP.

Gruenberg would likely keep a lower profile but he knows to hold his ground in any Washington turf fights that might emerge, former colleagues said, a quality that would do him well in the FDIC seat on the multi-regulator Financial Stability Oversight Council. I think he would understand that he would have to work with them but I don't think he would be a pushover, said Mark Oesterle, a one-time top aide to Richard Shelby, the top Republican on the Banking Committee.

(Reporting by Dave Clarke, Editing by Dave Zimmerman)