WASHINGTON, D.C.— Better Markets’ President and CEO Dennis Kelleher highlighted the real threat to the Federal Reserve from Senate Republicans doing the bidding of the oil and gas industry in blocking a vote on Sarah Bloom Raskin’s nomination for Vice Chair for Supervision. Below are excerpts from the The Hill Op Ed, which can be read in full here.
“Remarkably, although the Fed and the Vice Chair for Supervision regulate bank holding companies like JP Morgan Chase, Goldman Sachs, Citibank and others, those banks are not opposing the nominees.
“Rather, the Republicans are [boycotting a vote on Sarah Bloom Raskin for Vice Chair for Supervision] because the fossil fuel industry and its allies have stridently claimed that Ms. Raskin poses a threat to the Fed’s independence. They claim she will politicize the Fed by going outside what they claim are its narrow mandates and consider risks related to climate. They say that will result in the Fed engaging in “capital allocation” decisions, “chocking off” capital to a particular industry, and, thereby, “picking winners and losers.”
“However, while Ms. Raskin’s opponents have correctly identified the threat, they have misidentified the source: it’s not Ms. Raskin who poses a threat to the Fed’s independence, mission, and mandate, but those accusing her of doing so. “
“That is the real threat to the Fed.
“[T]he fossil fuels industry and its allies, with Senate Republicans in the lead, are trying to get the Fed to create a special exemption for any risks arising from the fossil fuel industry. They are, in effect, insisting on a de facto prohibition on the Fed from even looking at risks to the financial system arising from climate.
“That is nothing less than those Senators politicizing the Fed by telling it to give special treatment to this special interest, which is the real effort to pick winners and losers and engage in capital allocation decisions. Of course, if that were successful, many other industries would quickly lobby Senators to pressure financial regulatory nominees to exclude risks from their activities.
“If the Fed is to be independent, no one should be able to tell it what risks to evaluate or not. That would require the Fed to violate its mandates and threaten to cause another catastrophic financial crash. That’s the real threat to the Fed and that’s what’s at stake in the fight over Sarah Bloom Raskin.”
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.
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