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U.S. Chamber issues rare warning on Fed nominee Raskin, citing oil, gas views

EconomyJan 27, 2022 09:45PM ET
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© Reuters. FILE PHOTO: Sarah Bloom Raskin, in her role as deputy Treasury secretary in October 2014, participates in an open meeting of the President's Advisory Council on Financial Capability for Young Americans at the Treasury Department in Washington, October 2,

By Andrea Shalal

WASHINGTON (Reuters) -The U.S. Chamber of Commerce on Thursday sent an unprecedented letter to lawmakers raising concerns about Sarah Bloom Raskin, President Joe Biden's nominee as the Federal Reserve's vice chair for supervision, and her calls for federal regulators to transition financing away from the fossil fuel industry.

The U.S. industry lobby group urged leaders of the Senate Banking Committee to question Raskin about those statements and her criticism of the Fed for allowing oil and gas companies to access emergency pandemic funds, among other issues.

Tom Quaadman, executive vice president of the Chamber's Center for Capital Markets Competitiveness, said the trade group had never before sent a public letter questioning a Fed nominee, but noted the group had stopped short of opposing her nomination outright, at least for now.

"If you have someone who is coming up for the lead position on safety and soundness regulations, and they actually want to cut off an industry from the banking system, that starts to raise questions," he told Reuters.

Quaadman said Raskin's views would have "ramifications" for the U.S. and global economy, and the Chamber wanted to be sure that her policies were based on "solid data and input and not political ideology."

He said the Chamber, whose board includes big oil companies, would raise similar questions if a Republican nominee suggested excluding renewable energy companies from public funds.

White House spokesperson Michael Gwin said Raskin would bring unprecedented experience to the job and had won the support of economic experts across the political spectrum.

"Bloom Raskin believes firmly in the independent role of the Federal Reserve and will work in concert with Chair (Jerome) Powell and her colleagues to identify and mitigate a range of risks facing our financial system – including cyber and climate – within the Federal Reserve’s existing mandate," he said.

Raskin is "firmly opposed to the Federal Reserve allocating credit by sector or choking off sectors from access to credit," a senior administration official told Reuters. "She supports the existing policy framework on climate risks that has been articulated by Powell and (current Fed vice chair for supervision Randal) Quarles."

The banking committee, which must approve the Fed nominees before they are considered by the full Senate, will scheduled a confirmation hearing for Raskin and two economists nominated for the board, Lisa Cook and Philip Jefferson, on Feb. 3.

Senator Pat Toomey, the top Republican on the panel, also took aim at Raskin this week in a letter to Biden, saying the former Fed governor was "unacceptable" due to her "demonstrated hostility" toward the oil and gas sector.

The American Bankers Association on Jan. 14 congratulated Raskin, Cook and Jefferson on the nominations, saying they would bring "a wide range of economic, regulatory and academic experience" to the job.

Raskin, who also served as a senior Treasury official under former President Barack Obama, would replace Randal Quarles who was appointed the Fed's vice chair for supervision by Republican former President Donald Trump in 2017, if confirmed.

The bank supervision role is the most consequential of several vacancies on the Fed's seven-member Board of Governors available to be filled by Biden.

If confirmed, Raskin would drive policy on issues including climate change financial risks, community lending rules, and financial technology companies, and would likely to review several of Quarles' rule changes which spanned rules on banks' speculative investments, derivatives trading, liquidity and capital.

U.S. Chamber issues rare warning on Fed nominee Raskin, citing oil, gas views
 

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