Sen. Elizabeth Warren, D-Mass., criticized Federal Reserve Chairman Jerome Powell on Sunday and argued he “took a flamethrower” to banking regulations following the Silicon Valley bank collapse and allowed bank CEOS to wreck their companies.
“Jerome Powell just took a flamethrower to the regulations, weakened them, weakened them, weakened dozens of the regulations and then the CEOs of the banks did exact he what we expected. They loaded up on risk that boosted their short-term profits, they gave themselves huge bonuses and salaries and exploded their banks,” Warren said.
She also said former President Donald Trump put in bank regulators who “lightened” banking regulations.
Silicon Valley Bank collapsed on March 10 after a run on the bank and is considered the second-largest bank failure in U.S. history.
NBC’s Chuck Todd asked Warren about how concerned she is about the collapse “unraveling” the banking system.
“Well, in the moment, we’ve got the federal government obviously taking extraordinary action and they’ve done it to back up depositors and I think it’s fair to say that depositors should be able to take a pretty deep breath. The federal government has indicated there is going to be a lot of protection for you, but we have to worry about how much risk is in these multibillion-dollar banks, because it’s perfectly clear that these regulators were asleep at the switch.” Warren said.
Todd also asked Warren if President Biden should fire Powell.
“My views on Jay Powell are well known at this point. He has had two jobs, one is to deal with monetary policy. One is to deal with regulation. He has failed at both,” Warren said.
“Look, I don’t think he should be chairman of the Federal Reserve. I have said it as publicly as I know how to say it. I’ve said it to everyone.
Warren has called for Powell to recuse himself and “step back” from the review of the SVB collapse.
“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,” Warren told FOX Business’ Grady Trimble on Capitol Hill Wednesday.
“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,” she added. “That’s the only way we can have some confidence in it.”