Mar 19, 2023 - Economy

Warren calls for investigation into the Fed amid banking turmoil

Sen. Elizabeth Warren (D-Mass.) called for an independent investigation into the Federal Reserve and the banking regulatory system during an appearance on ABC's "This Week" on Sunday.

Why it matters: The banking sector is poised to head into a third week of existential questions and whipsaw volatility, despite official efforts to stabilize markets and reassure depositors, Axios' Pete Gannon writes.

State of play: "I'm calling for an independent investigation of the Fed and the whole regulatory system here. The fed doesn't just get to do its own investigation," Warren told the program.

  • Warren also called on the Fed to reverse the deregulation enacted during the previous administration and to "look at these banks with much more scrutiny."
  • Congress should also curb the ability of the Fed to weaken regulations, she added.
  • The CEOs of failed banks must also be held accountable, in order to ensure that their bonuses and salaries can be clawed back and that they are banned from banking in the future, Warren added.

The senator made similar remarks during an appearance Sunday on NBC's "Meet the Press," telling the program that the "Fed doesn't just get to investigate itself."

  • Regarding Federal Reserve chair Jerome Powell, Warren noted that he had "two jobs."
  • "One is to deal with monetary policy, one is to deal with regulation. He has failed at both," she said.

The big picture: The Federal Reserve said last week that it would conduct a review of the collapse of Silicon Valley Bank — including any possible regulatory or supervisory missteps.

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