Off The Wire
Powell says he would give Fed's vice chair of supervision 'degree of deference'
Nov 30 (Reuters) - Federal Reserve Chair Jerome Powell on Tuesday said he would give the U.S. central bank's next top Wall Street cop some deference but cautioned that any new appointee would have to convince both him and the rest of the Fed's Board of Governors on any proposed changes in banking rules.
Responding to a question from one of his most vocal critics in Congress, Powell made his comments two months after he signaled openness to Democratic demands for tougher regulation of Wall Street under a new regulatory chief. Democratic President Joe Biden renominated Powell for a second term as the Fed chief last week.
The vice chair for supervision role is currently vacant, with progressive Democrats urging Biden to appoint someone who will undo an easing of regulations under Randal Quarles, a Republican, who stepped down from the role in October. Powell, a former private equity executive and investment banker, has been regarded by some as too close to Wall Street and insufficiently tough on banks.
"A person who arrives, nominated by the president, confirmed by this body, with particular views, I would say that that person is entitled to a degree of deference but I wouldn’t overstate that," Powell said in response to questioning from Senator Elizabeth Warren of Massachusetts in testimony before the Senate Banking Committee.
"The person still has to convince the members of the board to vote for whatever that person is proposing."
Warren, a vociferous critic of the Fed's oversight of Wall Street who called Powell a "dangerous man" during one of his previous appearances before the committee, has said she will vote against his renomination as Fed chief.
Biden is considering Richard Cordray, who served as the first director of the Consumer Financial Protection Bureau that Warren helped establish, to serve as the Fed's top banking regulator, a source familiar with the matter told Reuters on Tuesday. read more
Cordray was popular among progressives like Warren for his firm stance against perceived Wall Street abuses, but was a frequent target of Republicans who argued his agency was unaccountable and that he wielded too much power.