Sen. Elizabeth Warren (D-MA) ratcheted up her criticism of Federal Reserve Chair Jerome Powell, contending he “took a flamethrower” to bank regulations.
In the wake of the Silicon Valley Bank collapse, Warren has urged Congress and regulators to strengthen oversight of the banking industry and recently claimed that Powell “directly contributed” to the failure, urging him to recuse himself from an internal review of the collapse.
SVB COLLAPSE: SCHUMER SIDESTEPS WHETHER HE’D SUPPORT WARREN BILL TO REGULATE BIG BANKS
“Donald Trump ran for president saying he would lighten the regulations on these banks,” Warren said on CBS’s Face The Nation. “And then Jerome Powell just literally took a flamethrower to these regulations in order to make them less and less effective.”
Earlier this month, Warren, who sits on the Senate Banking Committee, grilled Powell over the Fed’s plans to continue jacking up interest rates in a bid to tamp down inflation. Warren worried the move would fuel unemployment. She has long been a vocal critic of Powell and opposed both his appointment in 2018 and his reappointment by President Joe Biden last year.
“Jerome Powell has said that all he wants to do is lighten regulations on the banks,” Warren added. “I opposed him as chairman of the Federal Reserve Bank precisely for that reason.”
SVB was taken over by regulators on March 10 after the company announced it sold $21 billion in bonds, cementing $1.8 billion in previously unrealized losses, sparking a panic and mass withdrawal.
Since then, the Treasury Department, Fed, and Federal Deposit Insurance Corporation announced that depositors would be able to reclaim their money, effectively guaranteeing deposits over the $250,000 threshold backed by the FDIC.
“We need accountability for our regulators who clearly fell down on the job, and that starts with Jerome Powell,” Warren said. “And we need accountability for the executives of these large financial institutions.”
One of the regulatory structures Warren is keen on reviving is a 2018 rollback of Dodd-Frank Act regulations that eases stress test requirements for smaller and midsized banks. Warren warned of the regulatory clawback at the time and has championed legislation to restore those regulations. Dodd-Frank is a regulatory framework implemented in the aftermath of the 2008 financial crisis.
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Warren also underscored that she thinks Powell is failing in both his efforts to oversee the banking industry and his quest to quell inflation, though stopped short of directly imploring Biden to fire him when asked by NBC.
“I think he’s failing in both jobs. Both as the oversight manager of these big banks, which is his job, and also what he’s doing with inflation,” Warren told NBC’s Meet the Press. “I don’t think he should be Chairman of the Federal Reserve I have said it as publicly as I know how.”
