Joe Biden has called on Sarah Bloom Raskin, the former Assistant Secretary to the Treasury, to lead financial oversight of the Federal Reserve as the White House wants tighter regulations for big banks and more attention to the financial risks involved to climate change.
The US president sent Raskin’s appointment as the Fed’s vice chairman for oversight to the Senate on Thursday evening, where she will need to be confirmed for the post, according to a person familiar with the matter.
Biden also appointed Lisa Cook, professor of economics and international relations at Michigan State University, and Philip Jefferson, professor of economics at Davidson College, to fill the two remaining positions on the Fed’s board of governors.
Cook would be the first African-American woman in U.S. history to serve on the central bank’s board, while Jefferson would be the fourth African-American man to serve as Fed governor, fulfilling the pledge of Biden to bring more diversity to the central bank.
The selections conclude months of deliberation within the Biden administration on Fed leadership positions, including the decision to appoint Jay Powell for a second term as chairman and Lael Brainard, a sitting Fed governor , to be vice-president.
Powell and Brainard testified at their confirmation hearings before the Senate Banking Committee this week, promising to prioritize tackling inflation in monetary policy as price growth hit its highest level in about four decades.
Raskin, a law professor at Duke University who served as Assistant Secretary to the Treasury during Barack Obama’s presidency, has long been seen as one of the top contenders for the post. She was previously governor of the Fed and enjoys wide support among Democrats.
Raskin, 60, was first appointed to a Fed position in 2010 alongside Janet Yellen, who went on to become Fed President and currently serves as Secretary of the Treasury. Raskin played a pivotal role at the central bank in implementing the sweeping Dodd-Frank legislation that aimed to overhaul banking regulations after the global financial crisis.
At the Fed, she also focused on tackling income inequality and strengthening consumer protection, work she continued at the Treasury Department, in addition to leading cybersecurity issues.
More recently, Raskin, who is married to Jamie Raskin, a Democratic member of the Maryland House of Representatives, has become a strong advocate for bolder action by the central bank and other regulators to deal with financial threats arising from the climate change.
“In light of the unpredictable – but clearly intensifying – effects of climate change on the economy, US regulators will need to leave their comfort zone and act early before the problem escalates and becomes even more serious. expensive to solve, ”she wrote in September.
Republican lawmakers have challenged the Fed’s engagement on topics such as climate change, pressuring Brainard during his confirmation hearing Thursday over his support for more proactive consideration of environmental risks.
Pat Toomey, a Republican senator from Pennsylvania, has expressed reservations about Raskin’s stance on reducing lending to fossil fuel-intensive businesses and the Fed’s support for industry in times of crisis.
“I am seriously concerned that it is abusing the Fed’s narrow statutory mandates in monetary policy and banking supervision to make the central bank actively engage in capital allocation,” Toomey said in a statement. “Such actions not only threaten the independence and effectiveness of the Fed, but would also weaken economic growth.”
Powell has previously said that climate change “is really an issue that is attributed to many other government agencies, not so much the Fed,” and that the central bank was not and did not seek to “be climate decision-makers.” – comments that have been criticized by progressives.
But he also said he would welcome regulatory changes to the banking sector by the incoming central bank oversight vice president.
When asked in November by Elizabeth Warren, the Democratic Senator from Massachusetts, if he would “defer” to the vice president for oversight, Powell said: “I would expect to have a working relationship. perfectly normal and constructive ”with whoever has been confirmed.
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