(15 Mar 2023)

 
RESTRICTION SUMMARY:

ASSOCIATED PRESS
Washington – 22 September 2022
1. STILL of Sen. Elizabeth Warren speaking at a Senate Banking Committee hearing
 
ASSOCIATED PRESS
Washington – 15 March 2023
2. SOUNDBITE (English) Sen. Elizabeth Warren, (D) Massachusetts:
“The problem that we’ve seen most recently is that we’re we’re reaping the consequences of lighter regulation. When Chair Powell started leading the deregulatory movement in the Federal Reserve and getting the regulators to lighten up, the consequence is problems get missed, the oversight becomes lighter. The stress tests during Pal’s term have become easier. They’ve become less frequent. And that means that problems that bubble up, problems because the executives want to boost those profits and the best way to boost profits take out a little more risk and a little more risk, that those problems don’t get tamped out early.”
 
(Reporter: Is that why you’ve asked Chair Powell to recuse himself from this review?)
 
3. SOUNDBITE (English) Sen. Elizabeth Warren, (D) Massachusetts:
“Yes. For this review to have any credibility at all, Chair Powell has to recuse himself. He is the one who not only presided over the Fed, who not only came to Congress and answered questions from me and from others about this deregulatory move, but actually led it. And it’s important that while we’re examining what went wrong, that Chair Powell take a step back and let Michael Barr, who is the new vice chair, who was not there during all of this, let him conduct an independent investigation. That’s the only way we can have some confidence in it.”
 
(Reporter: Senator, what’s your message to the over a dozen members of your own party, some of whom are still in office, who voted in 2018 to roll back, to soften some of these bank regulations?)
 
4. SOUNDBITE (English) Sen. Elizabeth Warren, (D) Massachusetts:
“We need to learn from what has just happened with these banks and go forward by tightening the regulations. It’s just that simple. When we roll back regulations so that bank executives can use these banks to boost their profits, to boost their own salaries, to get big bonuses, they are doing it by taking on more risk. Banking should be boring. And we have a chance here in Congress to make banking more boring again. We should take it now.”
 
(Reporter: Do you consider what the administration did to be a bailout for the Signature Bank and SVB?)
 
5. SOUNDBITE (English) Sen. Elizabeth Warren, (D) Massachusetts:
“You know, the administration’s in a really tough spot because of the failure of the regulators and failure of oversight. I think they did the right thing by saying that these small businesses, these nonprofits who don’t evaluate the quality of a bank, they put their money in the bank and they expect it to be there when they’re trying to make payroll or pay the utility bills. I think that the government was right  to step in. Now, as for the really big depositors, the ones who put in a billion dollars, they’re not like ordinary depositors. They’re much more like investors. And I think they should have been treated differently.”
 
(Reporter: But I guess it begs the question, does this mean that every deposit is going to be protected by the government in every bank?)
 
6. SOUNDBITE (English) Sen. Elizabeth Warren, (D) Massachusetts:
“Well, that’s that is certainly what has happened in the two that have failed, and they’ve set up a facility to make certain that there will be adequate money for all of the depositors going forward, at least through this period of crisis.”
 
 

++ENDS ON SOUNDBITE++
 
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On Tuesday, Senator Elizabeth Warren fiercely criticized Federal Reserve Chairman Jerome Powell at a Senate Banking Committee hearing over his handling of bank failures during the COVID-19 pandemic.

Sen. Warren accused Powell of allowing banks to stop lending while also rewarding them for their failures, arguing that the Fed was “letting banks off the hook for bad behavior.”

She argued that the Fed’s stress tests had failed to uncover problems at banks like Wells Fargo and that Powell had not done enough to hold banks accountable for their role in the economic crisis caused by the pandemic.

“Is it appropriate for the Fed to use its power to give banks a free pass on all this bad behavior?” Warren asked.

Powell defended the Fed’s actions, saying that it had been necessary to support the industry during a time of crisis, but acknowledged that “there are things that are going to need to change.”

“It’s important that we put the banks’ feet to the fire so that they understand that there will be consequences for their actions,” Powell said.

The exchange between Warren and Powell highlights the ongoing debate over how to regulate banks and financial institutions in the wake of the economic fallout caused by the pandemic.

While many lawmakers and industry experts have called for stricter regulations and increased oversight, others have argued that the industry needs more flexibility to adapt to rapidly changing economic conditions.

Regardless of the outcome of this debate, it is clear that policymakers must take proactive steps to prevent future economic crises and protect consumers from the fallout of bank failures.

As the COVID-19 pandemic continues to wreak havoc on the economy, the stakes are higher than ever for this important policy debate.