The KBW Bank Stock Index rose by 2.2% at one point, reaching the highest intraday level since December 16, after the Federal Reserve announced that Michael Barr will resign as Vice Chairman of Supervision, effective from February 28 or an earlier time when a successor is confirmed.

Recommended reading: Michael Barr will resign from his position as Vice Chairman of Supervision at the Federal Reserve.

Adam Crisafulli from Vital Knowledge wrote: "Barr is seen as an advocate for strengthening industry regulation and capital rules, so his departure from the bank supervision role is seen positively."

"Bank stocks have already somewhat reflected the optimism of regulatory easing, so Barr's news mainly reinforces this mainstream narrative rather than being an extremely bullish data point."

Crisafulli stated that reports suggest Trump intends to fire Barr, so his resignation may avoid a lengthy legal battle.

As of 11:30 New York time, all 24 stocks in the KBW Bank Stock Index were up, with Citigroup, Western Alliance, and Morgan Stanley leading the gains.

Barr will continue to serve as a member of the Federal Reserve Board.