Elizabeth Warren

The actions of the Chair of the Federal Reserve and a Governor of the Federal Reserve were unambiguously inconsistent with the Fed's rules.

Twenty years ago the GAO came to Congress, long before I was here, long before Senator Kennedy was here, and said, 'Change it because it is a mistake.'

This is the most severe ethics scandal in the Fed's 110-year history, yet other than a few officials taking an early retirement we have seen no accountability.

Do you think that creates a conflict of interest?

Now I think it is long past time that Congress finally acts, and I have bipartisan legislation with Senator Scott to do that.

I have got an idea, a bipartisan idea that I am introducing with Senator Rick Scott today: get the big bankers off the Federal Reserve boards of directors.

Independence should not be conflated, however, with a total lack of accountability when the Fed and its leadership make serious mistakes.

Welcome to the hearing of the Senate Banking, Housing, and Urban Affairs Subcommittee on Economic Policy.

Senator Scott and I also introduced a bill, which was included in a separate bill with Sen. Tillis, to give the Fed a true, Senate-confirmed independent Inspector General to serve as an agency watchdog.

I've got an idea--a bipartisan idea that I'm introducing with Sen. Rick Scott today: get the big bankers off the Reserve Banks boards of directors.

The Fed's report also laid blame at the feet of Congress for passing legislation to weaken bank rules--an agenda that Chair Powell eagerly embraced.

I'm working on bipartisan legislation to claw back money when executives take big bonuses for blowing up their banks.

I warned about in 2018 when I opposed Powell's nomination as Fed Chair and again in 2021 when I said that he was a dangerous man to keep at the Fed.

It is time to end the Fed's culture of corruption.

I think that the proposal from you and Senator Scott, which I have reviewed, does not go as far as I would like.

So it sounds like to me that this is clearly a case of the fox guarding the henhouse all the way through the system here.

Senator Rick Scott and I introduced a bipartisan bill today that would prohibit big bankers from serving as Reserve bank directors.

So let me just get this straight. Two-thirds of the people that oversee each of the Reserve banks, and hand-pick the leadership, are elected by the very same banks that are regulated by the Reserve bank, and three of those people actually…

Right. OK. So this chummy little group is making a lot of policy here, and nobody else gets to see it.

I have introduced a bill to repeal Title IV of S. 2155, which would undo the Fed's deregulation of the biggest banks.

You do not get to write a law that shoves the Fed in a strictly deregulatory direction and then turn around and say, 'Gee, we wish they had not deregulated.'

S. 2155 weakened the rules and the supervision for these banks like SVB and opened the deregulatory door for the Fed to drive a truck through.

The Fed should have used its authority to apply stronger rules to banks with more than $100 billion in assets.

The Fed heard that message loud and clear, and then it used that message to open up and start to deregulate even further.

The loosening ends up having multiplier effects, that once you loosen a little bit you lose other discipline in the system.