Democratic Senator Elizabeth Warren announced Tuesday that she will oppose Federal Reserve Chairman Jerome Powell’s renomination, making her the highest-profile lawmaker to do so.
“Your record gives me grave concern. Over and over you have acted to make our banking system less safe. And that makes you a dangerous man to head up the Fed,” Warren told Powell during a Senate Banking Committee hearing.
Warren argued the Powell-led Fed took “plenty of actions to weaken” oversight of banks, including by adjusting bank stress tests, the Volcker Rule and liquidity requirements.
Powell — a Republican appointed by former President Donald Trump — disagreed that those moves were deregulatory, though he conceded it’s “fair game” to examine the Fed’s actions. He also stressed that banks had enough capital to get through the recession.
“Renominating you means gambling the next five years a Republican majority of the Federal Reserve with a Republican chair who has regularly voted to deregulate Wall Street won’t drive this economy over a financial cliff again,” Warren said. “With so many qualified candidates for this job, I just don’t think that’s a risk worth taking.”
Echoing concerns voiced recently by former banking regulator Sheila Bair, Warren warned that deregulation raises the risk of repeating the Great Recession.
“So far you’ve been lucky, but the 2008 crash shows what happens when the luck runs out,” Warren said. “The seeds of the 2008 crash were planted years in advance by major regulators like the Federal Reserve that refused to rein in the big banks.”
Powell’s term leading the Fed expires in February and the White House has not said whether President Joe Biden will move to renominate him. Last month, progressives led by New York Democratic Rep. Alexandria Ocasio-Cortez urged Biden to replace Powell because of concerns about his regulatory and climate track record.
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