WASHINGTON, D.C.— Dennis M. Kelleher, Co-founder, President and CEO, issued the following statement in connection with Federal Reserve Board of Governors’ Chair Jay Powell’s Testimony before House and Senate hearings this week. Better Markets released a “6 Key Questions” Fact Sheet ahead of the hearings available here.
“The Chair of the Federal Reserve Board is required to testify before Congress so that the American people through their elected representatives can have some measure of transparency, oversight, and, ideally, accountability for the Fed’s actions. Given those actions impact the lives, livelihoods, and standard of living of every American, it is imperative that the Chair be asked questions about the key issues facing our financial system and economy and that he provides clear, direct answers.
“Three of the four largest bank failures in U.S. history happened this spring and egregious failures by the Fed and other banking regulators were key contributors. While Chair Powell will no doubt be asked about monetary policy, he must also be asked about those bank and Fed failures, the Fed’s shocking lack of urgency in addressing known weaknesses to prevent the next crisis, the dangerous lack of capital in the banking system, among other key subjects. For example, the Fed and other banking regulators quickly threw more than $30 billion at Silicon Valley Bank, Signature Bank, and First Republic Bank to prevent the banking crisis from getting worse but propose to engage in multiyear rulemakings to prevent the next crisis. That is grossly inadequate and all but guarantees another crisis. Chair Powell needs to be asked about enacting immediately effective interim final rules to prevent the next crisis, including increasing capital and liquidity, making stress tests stressful again, and requiring banks to have workable resolution plans. Additionally, he must answer for the Fed’s repeated failures to identify basic, obvious, and well-known risks that are inevitable in a rising rate environment, as well as the failure to regulate nonbank systemic risks, and the wholly inadequate response to the personal trading scandal by senior Fed officials.
“Details for those questions with background materials can be found in the fact sheet we are releasing today online here.”
Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.