US Sen Scott pushes for new Fed inspector general, slams Fed over bank
regulation
Send a link to a friend
[March 21, 2023]
By David Morgan
WASHINGTON (Reuters) - Republican U.S. Senator Rick Scott said on Monday
he will introduce legislation to create an independent inspector general
to oversee the Federal Reserve, as he called the U.S. central bank
"unable or unwilling to properly regulate" banks in a letter to Fed
Chair Jerome Powell.
Scott, a Republican known for his hardline conservative positions,
informed Powell of his plans in a March 20 letter that questioned the
U.S. central bank's ability to oversee the banking system, following the
collapse of Silicon Valley Bank and Signature Bank earlier this month.
"I am proposing legislation to establish a presidentially-appointed and
Senate-confirmed inspector general for the Federal Reserve," Scott told
Powell in the letter. "Would you support adding this much-needed level
of accountability?"
"For too long, the Federal Reserve has used its claim of independence to
thwart Congress and the American people while being unable or unwilling
to properly regulate and supervise the large financial institutions
under its care," Scott wrote.
There was no immediate response from the Fed.
Scott is expected to introduce the legislation later this week,
according to an aide.
Republicans and Democrats in Congress have pledged tighter oversight of
banking regulators following the collapse of Silicon Valley Bank and
Signature Bank, which has been followed by billions of dollars in losses
for financial stocks.
The Federal Reserve is responsible for supervising - monitoring,
inspecting and examining - certain financial institutions to ensure that
they comply with rules and regulations, and that they operate in a safe
and sound manner.
[to top of second column]
|
U.S. Senator Rick Scott (R-FL) gestures
as he speaks at the Conservative Political Action Conference (CPAC)
at Gaylord National Convention Center in National Harbor, Maryland,
U.S., March 2, 2023. REUTERS/Sarah Silbiger
Some lawmakers have singled out the San Francisco Federal Reserve
Bank for criticism, among them Democratic Senator Elizabeth Warren,
who told an interviewer on Sunday that she does not have faith in
the bank's president, Mary Daly.
The San Francisco Fed was responsible for oversight of Silicon
Valley Bank.
Scott's legislation stems from concern in Congress that the Federal
Reserve's current inspector general is not independent enough to
serve as a check on the central bank.
When Congress created Inspectors General in the 1970s, the Federal
Reserve was a much smaller and less complicated entity, said Andrew
Levin, an economics professor at Dartmouth and a former Fed
official.
The Fed was assigned an internal IG that reports directly to the Fed
board, rather than a completely independent auditor, like the
Pentagon or other big agencies.
Scott also urged the Fed chief to use the central bank's policy
meeting this week to examine the bank failures and identify
accountable Fed personnel.
"The failures and malfeasance, not only of these banks, but their
regulators, should be at the top of the agenda," Scott said.
"Before the meeting concludes, it is my expectation that you name
the individual(s) being fired for these failures, and make clear
your support for significant accountability measures at both the
Federal Reserve and our banks."
(Reporting by David Morgan and Heather Timmons; Editing by Leslie
Adler)
[© 2023 Thomson Reuters. All rights
reserved.]This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |