Sen. Warren to Fed Chair Powell: ‘The Accountability Is Zero, Our Banking System Is Broken’

Warren Thank you Mr ░░░░░░░░ So in 2010 Congress ░░░░░░░░ Dodd Frank to make ░░░░░░░░ regulations tougher and to ░░░░░░░░ future bank collapses And ░░░░░░░░ soon after that bank ░░░░░░░░ started lobbying for weaker ░░░░░░░░ Now Chair Powell you ░░░░░░░░ lobbied for weaker rules ░░░░░░░░ President Trump first nominated ░░░░░░░░ as Fed chair in ░░░░░░░░ you testified actually in ░░░░░░░░ very room I think ░░░░░░░░ you intended to quote ░░░░░░░░ appropriate ways to ease ░░░░░░░░ burdens for the banks ░░░░░░░░ when I asked you ░░░░░░░░ there were any rules ░░░░░░░░ rules at all that ░░░░░░░░ thought ought to be ░░░░░░░░ stronger do do you ░░░░░░░░ what you said Powell ░░░░░░░░ think I pointed to ░░░░░░░░ net stable funding ratio ░░░░░░░░ No actually that s ░░░░░░░░ what you said You ░░░░░░░░ Honestly senator I think ░░░░░░░░ re tough enough You ░░░░░░░░ t point to anything ░░░░░░░░ thought should be tougher ░░░░░░░░ 2018 Powell In the ░░░░░░░░ we strengthen the net ░░░░░░░░ funding yeah Warren Well ░░░░░░░░ 2018 you supported Congress ░░░░░░░░ of those rules You ░░░░░░░░ the Fed in hacking ░░░░░░░░ at one rule after ░░░░░░░░ According to the Fed ░░░░░░░░ own analysis of the ░░░░░░░░ Valley Bank failure you ░░░░░░░░ the rules in multiple ░░░░░░░░ you reduced capital requirements ░░░░░░░░ weakened liquidity risk management ░░░░░░░░ skipped out on using ░░░░░░░░ stress testing for banks ░░░░░░░░ tens of billions of ░░░░░░░░ in assets and more ░░░░░░░░ the result was the ░░░░░░░░ third and fourth largest ░░░░░░░░ failures in U S ░░░░░░░░ which together required 23 ░░░░░░░░ in bailout money In ░░░░░░░░ you now hold the ░░░░░░░░ In a single year ░░░░░░░░ FDIC has been forced ░░░░░░░░ rescue more giant failed ░░░░░░░░ on your watch than ░░░░░░░░ Fed chair in American ░░░░░░░░ Chair Powell do you ░░░░░░░░ with Vice Chair Barr ░░░░░░░░ conclusion that the Fed ░░░░░░░░ a big share of ░░░░░░░░ responsibility for the failure ░░░░░░░░ SVB Powell I think ░░░░░░░░ certainly think that our ░░░░░░░░ has been shown to ░░░░░░░░ been lax in not ░░░░░░░░ assertive enough I think ░░░░░░░░ the supervisors saw the ░░░░░░░░ issues and but weren ░░░░░░░░ forceful enough in hindsight ░░░░░░░░ I think that s ░░░░░░░░ a fair conclusion Warren ░░░░░░░░ so those regulations were ░░░░░░░░ those supervisors were clearly ░░░░░░░░ at the switch for ░░░░░░░░ than five years under ░░░░░░░░ watch And I ll ░░░░░░░░ say it again this ░░░░░░░░ exactly why I opposed ░░░░░░░░ nomination in 2017 The ░░░░░░░░ that you made the ░░░░░░░░ that you took and ░░░░░░░░ things that you said ░░░░░░░░ cause this mess And ░░░░░░░░ you were up for ░░░░░░░░ in 2021 I opposed ░░░░░░░░ confirmation because I believed ░░░░░░░░ your continued leadership would ░░░░░░░░ dangerous to our financial ░░░░░░░░ And the Fed s ░░░░░░░░ report confirms that So ░░░░░░░░ Chair Powell this committee ░░░░░░░░ on a bill to ░░░░░░░░ hold CEOs accountable when ░░░░░░░░ actions blow up banks ░░░░░░░░ the Fed you are ░░░░░░░░ one who lobbied who ░░░░░░░░ and who voted for ░░░░░░░░ rules and you were ░░░░░░░░ responsible for the team ░░░░░░░░ Fed supervisors who fell ░░░░░░░░ on the job Do ░░░░░░░░ take responsibility for your ░░░░░░░░ in these bank failures ░░░░░░░░ So I think we ░░░░░░░░ some lessons from the ░░░░░░░░ the bank failures and ░░░░░░░░ the main responsibility I ░░░░░░░░ is to learn the ░░░░░░░░ lessons from this and ░░░░░░░░ undertake to address them ░░░░░░░░ we don t have ░░░░░░░░ situation like this where ░░░░░░░░ had unexpectedly a large ░░░░░░░░ fail and spread contagion ░░░░░░░░ the banking system That ░░░░░░░░ not supposed to happen ░░░░░░░░ we need to take ░░░░░░░░ steps to make sure ░░░░░░░░ doesn t happen again ░░░░░░░░ So I just want ░░░░░░░░ make sure I understand ░░░░░░░░ you mean when you ░░░░░░░░ you take responsibility Do ░░░░░░░░ take responsibility for your ░░░░░░░░ that led to the ░░░░░░░░ of these banks Powell ░░░░░░░░ think it s I ░░░░░░░░ the question of what ░░░░░░░░ supervision was was at ░░░░░░░░ that s both at ░░░░░░░░ board and at the ░░░░░░░░ banks Warren And are ░░░░░░░░ ultimately responsible for the ░░░░░░░░ Are you in charge ░░░░░░░░ Powell Under the law ░░░░░░░░ vice chair for supervision ░░░░░░░░ sole authority Warren Okay ░░░░░░░░ you take no responsibility ░░░░░░░░ this Powell I didn ░░░░░░░░ say that Warren Well ░░░░░░░░ s what I m ░░░░░░░░ to ask Powell That ░░░░░░░░ not what I said ░░░░░░░░ I m trying to ░░░░░░░░ what you take responsibility ░░░░░░░░ Powell I take responsibility ░░░░░░░░ addressing the situation appropriately ░░░░░░░░ That s talking about ░░░░░░░░ forward Powell That s ░░░░░░░░ focus It s going ░░░░░░░░ Warren Yeah well that ░░░░░░░░ of sounds like not ░░░░░░░░ responsibility for what you ░░░░░░░░ done in the past ░░░░░░░░ know month ago we ░░░░░░░░ the CEOs of the ░░░░░░░░ that exploded in here ░░░░░░░░ each of them had ░░░░░░░░ up huge bonuses and ░░░░░░░░ of them said they ░░░░░░░░ to keep every penny ░░░░░░░░ that money And now ░░░░░░░░ have the chair of ░░░░░░░░ Federal Reserve who led ░░░░░░░░ charge to weaken bank ░░░░░░░░ who oversaw the bank ░░░░░░░░ who failed miserably to ░░░░░░░░ these banks in line ░░░░░░░░ again the accountability is ░░░░░░░░ Our banking system is ░░░░░░░░ 23 billion in bailout ░░░░░░░░ and there is no ░░░░░░░░ for those at the ░░░░░░░░ And once again the ░░░░░░░░ who didn t cause ░░░░░░░░ mess are forced to ░░░░░░░░ it up We need ░░░░░░░░ changes here Mr Chairman ░░░░░░░░ yield.”