Senator Warren doubles down on Jerome Powell’s ‘failure’ amid SVB collapse
Senator Elizabeth Warren, Democrat of Massachusetts, went on Sunday to speak out against Federal Reserve Chairman Jerome Powell over the recent collapse of Silicon Valley Bank (SBV).
Powell, who remains Fed Chairman under President Joe Biden, was first appointed to the position by former President Donald Trump in 2018. With Powell and help from Republicans and some Democrats in Congress, Trump was able to overturn many banking regulations, including provisions of the Dodd-Frank Act that subjected banks with more than $50 billion in assets to greater scrutiny and “stress tests.”
Newer, looser regulations established by Trump and Powell were seen by some as a major factor in the failure of SVB, the second-largest banking meltdown in US history. With approximately $209 billion in total assets, the bank has not been subjected to the stress tests that would have determined its ability to withstand financial shocks, including the bank run by panicked depositors that ultimately led to its collapse.
On Sunday, Warren appeared on CBS News Confront the Nation and NBC News’ Meet the press where she criticized Powell for his role in overturning banking regulations. Warren said Powell had “failed” in the tasks he was given and added that he doesn’t think he should be Fed chairman.
“Donald Trump ran for president saying he would ease the regulation of these banks,” Warren said during his appearance on Confront the Nation. “And then Jerome Powell literally took a flamethrower to these regulations in order to make them less and less effective.”
She added during her appearance on Meet the press the same morning: “My views on Jay Powell are well known at this point. He had two jobs: one is to deal with monetary policy, the other is to deal with regulation. He failed in both.
When pressed by host Chuck Todd about whether she would advise Biden to replace Powell, Warren said she didn’t believe “he should be chairman of the Federal Reserve,” but didn’t. emphatically called on Biden to replace him.
“I said it as publicly as I know how to say it,” added the Democratic senator. “I told everyone.”
Warren, alongside fellow progressive Rep. Katie Porter, a California Democrat, is leading a campaign to repeal 2018 Trump legislation which they say loosened banking regulations too much and led to the collapse of SVB and other institutions. . The repeal would lower the asset threshold for stress tests to $50 billion from its current limit of $250 billion, among other provisions that were rolled back in 2018.
Newsweek contacted the Federal Reserve and White House press offices by email for comment.