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Sarah Bloom Raskin is a longtime Washington policy player with progressive degrees and a track record of speaking against the fossil fuel industry, qualities that have earned her the White House nomination to become America’s top banking police.

But those same views could leave her with a narrow path to confirmation as vice chair of oversight for the Federal Reserve — especially if Senator Ben Ray Luján, a New Democrat Mexican, recovery after stroke, was not present to vote before the full Senate. (A senior aide to Mr. Luján said he expected to make a full recovery and return in four to six weeks, unless there were complications.)

And Ms. Raskin’s views sparked her testimony before the Senate Banking Committee on Thursday.

Ms. Raskin was nominated along with Lisa D. Cook and Philip N. Jefferson, both economists for seats on the Fed’s Board of Governors. Mrs. Raskin, Dr. Cook and Dr. Jefferson field questions from the Senate Committee on Banking, Housing and Urbanism on Thursday morning.

Ms. Raskin, a former Fed governor and senior Treasury Department official who was most recently a professor at Duke Law School, is seen by the banking industry as the entity she will oversee. But business groups have criticized her attention to climate issues – including an idea She wrote in 2020 criticizing the Fed’s decision to design one of its emergency lending programs in a way that would allow fossil fuel companies access to emergency loans.

Senator Patrick J. Toomey of Pennsylvania, the top Republican on the committee, called the hearing a “referendum on Fed independence” in his opening remarks, and tore it up. Raskin about her views on climate regulation, which he previously called “kind of.”

Such outcry from Republicans could be more than just a heated hearing – Ms. Raskin may need to maintain the support of every Democrat in the Senate to stay on track. narrow leads to confirmation. If Democrats lose their Senate majority because Luján has yet to return, it is unclear whether she will win the votes she needs to pass.

Fed candidates need a simple majority to get past the Senate Banking Committee and then win confirmation from the Senate as a whole, meaning there’s a chance Ms. Raskin could slip through if all 50 Senators meeting behind closed doors with Democrats voted in her favor, with Vice President Kamala Harris breaking her tie.

The vice president of oversight is arguably the most important job in American financial regulation, and with those high stakes, Ms. Raskin’s chances are being watched closely.

Ian Katz, managing director at Capital Alpha Partners, said: “I don’t expect her to get many Republican votes, if at all, and explained that he thinks she’s going to secure enough in the end. Democratic support to pass, assuming all Senators, including Mr. Luján, vote. “You hear different things from the industry: You hear some concerns that she’s too progressive, but you also hear that she’s very good at the core.”

Oil and gas businesses are waging a campaign against more assertive climate monitoring by the Fed, fearing that the central bank will subject banks to stringent scrutiny that makes it impossible for them to let industry loans. This may raise questions of skepticism for all three nominees.

“I am concerned about all of the Fed’s candidates and their apparent willingness, despite what some of them say, including banking and financial regulations designed to outlaw the legitimate industry operating in the United States borrows money,” Senator Jerry Moran of Kansas, a Republican who sits on the committee, said Wednesday.

Mr Toomey said in an interview on Wednesday that he also had some reservations about Dr Cook.

Credit…Pool photo by Ken Cedeno

Much of the opposition, however, from Republicans and lobbyists was directed at Ms. Raskin. She argues in a column of Project Syndicate recently that “all U.S. regulators can — and should — review their existing powers and consider how they can be exercised in climate risk reduction efforts. “

But Ms. Raskin had a softer tone at the hearing, rejecting the idea that she would support using bank supervision to cut lending to oil and gas companies.

“It is not appropriate for the Fed to make decisions and allocate credit based on winners and losers – banks choose their borrowers, the Fed does not,” Ms. Raskin repeatedly said before the questions. questions from senators. She also stressed that Fed policymaking is a collaborative process and she will not make decisions alone.

It is currently unclear whether those assurances will be enough for her critics. Mr Toomey read Ms Raskin her previous comments on climate regulation as she testified.

Chamber of Commerce, in a letter before a Senate committee last week, urged lawmakers to ask Ms. Raskin for her views on whether the Fed’s regulatory approach should try to limit credit access for oil and gas companies. Are not.

The business group asked if Ms. Raskin was independent from politics. After the Democratic members of the Federal Deposit Insurance Corporation Board of Directors clash With and ultimately leading to the resignation of Trump appointee Jelena McWilliams, who is chair of the regulator, some Republicans have raised concerns that something similar could happen at the Fed. .

In December, partisan politics helped eliminate the nomination of Saule Omarova, who self-retreat from being seen as the controller of the currency after attacks from Republicans and banking lobbyists, and as she struggled to garner broad enough support from the Democratic Party.

In contrast, the banking industry has a more favorable view of Ms. Raskin. The Financial Services Forum, which represents executives from the largest banks, congratulates Ms. Raskin and other White House Fed picks in a statement after their nominations were announced, as well as American Bankers Association.

Ms. Raskin is considered a qualified candidate who understands the roles of different regulators in overseeing banks, according to a banking industry executive who requested anonymity during discussions. on regulatory matters. While bankers expect Ms Raskin to be confirmed, they are waiting for more clarity around her stance on climate finance and disclosures, the executive said.

When she was seen as a primary choice, centrist Democrats were pleased with Ms. Raskin.

“I’m very impressed with her,” Senator Mark Warner, a Democrat of Virginia, said Tuesday, adding that he hasn’t met her yet but he has “a good feeling” and notes that the The bank expressed comfort to her.

Senator Joe Manchin III from West Virginia, a key centrist Democrat, said Wednesday that he has yet to research the nominees, adding that he “will be involved in that.” because he was “very interested” in issues including inflation.

A Harvard-trained attorney, Ms. Raskin is a former deputy secretary at the Treasury Department, where she gathers on cybersecurity of the financial system, among other issues. She also spent several years as Maryland’s financial regulator. Ms. Raskin is married to Congressman Jamie Raskin, a Maryland Democrat.

If confirmed, she would be only the second person to be officially appointed as the Fed’s vice chair of oversight, succeeding Randal K. Quarles, a Trump administration pick who has generally advocated light regulation. more and more precise. In contrast, Raskin has a track record of calling for stricter regulations.

Dr. Cook and Dr. Jefferson can both be asked about their views on policy and professional background. The Fed has seven governors — including the president, vice president, and vice president of oversight — who vote on monetary policy along with five of its 12 regional bank presidents. The governors hold an ongoing vote on the regulation.

Credit…Pool photo by Ken Cedeno

Dr. Cook, who will be the first black woman to sit on the Fed’s board, is a Michigan State University economist known for his work trying to improve diversity in economics. . She earned a doctorate in economics from the University of California, Berkeley, and served as an economist on the White House Council of Economic Advisers under President Barack Obama.

“High inflation is a serious threat to long-term and sustainable expansion, which we know will raise living standards for all Americans and lead to widespread, shared prosperity.” Dr. Cook saidAfter highlighting her decades of experience, she called addressing the current US price boom the Fed’s “most important task”.

Dr. Jefferson, also black, is an administrator and economist at Davidson University who has worked as a research economist at the Fed. He wrote about The economics of povertyand his research delves into whether monetary policy that encourages investment with low interest rates helps or hurts uneducated workers.

He agree with that The Fed must “make sure that inflation falls to a level that is consistent with its target.”

Dr. Cook, Dr. Jefferson and Ms. Raskin were confirmed along with Jerome H. Powell – who had previously resigned as Fed chair – and Lael Brainard, the Fed governor who was selected by the Biden administration for the position of deputy. chairperson. Senator Sherrod Brown of Ohio, who chairs the committee, said all five candidates will face a key committee vote on February 15, and Senator Chuck Schumer of New York. , the majority leader, “knows how to move quickly” to have a sufficient vote on the floor.

If all passes, the Fed leadership will is the most diverse about both race and gender it once was – delivering on Mr. Biden’s pledge to make the long-standing white and male central bank more representative of the public it intends to serve.

https://www.nytimes.com/live/2022/02/03/business/stock-market-economy-news Stocks, interest rates and the latest business news: Live updates

Fry Electronics Team

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