Raskin Faces Senate Questions Over Views on Climate Change, Regulations

Raskin Faces Senate Questions Over Views on Climate Change, Regulations



WASHINGTON—

Sarah Bloom Raskin,

President Biden’s nominee to become the government’s top bank regulator, goes to Capitol Hill on Thursday to face lawmakers’ questions about her support for tougher banking rules and for using financial regulation to address climate change—positions cheered by Democrats but criticized by Republicans.

Mr. Biden picked Ms. Raskin to serve as the Federal Reserve’s vice chairwoman for banking supervision. She is set to appear at her Senate Banking Committee confirmation hearing along with two economists nominated for other Fed board seats:

Lisa Cook,

a professor of economics and international relations at Michigan State University, and

Philip Jefferson,

a professor and administrator at Davidson College in North Carolina.

The three nominees said in their prepared testimony, which was released by the committee Wednesday, that the Fed must make it a priority to tackle high inflation. They didn’t comment on Fed officials’ recent signals that they would begin steadily raising interest rates in mid-March to combat price pressures.

“The spike in inflation we are seeing today threatens to heighten expectations of future inflation,” Mr. Jefferson said. “The Federal Reserve must remain attentive to this risk and ensure that inflation declines to levels consistent with its goals.”

To temper elevated inflation, Federal Reserve Chairman Jerome Powell said the central bank intends to raise short-term interest rates in mid-March. Photo: Federal Reserve

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Ahead of the hearing, the U.S. Chamber of Commerce urged Senate lawmakers to scrutinize Ms. Raskin’s views on climate change and other matters, while 41 oil-and-gas trade groups pressed lawmakers to oppose her, citing her stances on climate change.

Ms. Raskin hasn’t encountered opposition from banks that helped torpedo the nomination of Saule Omarova, an academic Mr. Biden tapped last year for a separate post overseeing national banks. That fight was led by community banks, which have a more favorable view of Ms. Raskin from her former stints in government.

The American Bankers Association and the Financial Services Forum, which represents the largest U.S. lenders, issued statements congratulating her on her nomination.

Ms. Raskin, a lawyer, served as a Fed governor and as a top Treasury Department official during the Obama administration. Before that, she served as Maryland’s state commissioner of financial regulation. She is a law professor at Duke University and is married to

Rep. Jamie Raskin

(D., Md.).

Ms. Raskin’s calls for the Fed to play a more active role in combating climate change have attracted opposition from Republicans. In a New York Times opinion article in May 2020, Ms. Raskin was critical of broad-based emergency-lending backstops enacted by the Treasury and Fed to assist businesses during the pandemic, because she believed they should have taken steps to prevent lending to oil-and-gas concerns.

“The decisions the Fed makes on our behalf should build toward a stronger economy with more jobs in innovative industries—not prop up and enrich dying ones,” she wrote.

Republicans say addressing climate change goes beyond the Fed’s mandate. “What we do about climate is a tough set of decisions that need to be hashed out through a politically accountable process, not the Fed,” said

Sen. Pat Toomey

of Pennsylvania, the ranking Republican on the committee, in a Wednesday interview on CNBC.

Banking Committee Chairman

Sherrod Brown

(D., Ohio) said in a statement before the hearing that Ms. Raskin “is exactly who we need as Vice Chair for Supervision at the Fed to protect American families and Main Street businesses from risks in our economy.”

In her prepared testimony, Ms. Raskin said that her role at the Fed would entail working closely with other central bank officials and banks to identify, analyze and manage their risks. “The role does not involve directing banks to make loans only to specific sectors, or to avoid making loans to particular sectors,” she said.

With a closely divided Senate, Mr. Biden needs either the support of all Democrats to confirm his nominees, or support from some Republicans to overcome holdouts from his own party.

Moderate Democrats on the Senate Banking panel who may hold the key to Ms. Raskin’s confirmation have yet to say whether they will support her. Montana Sen. Jon Tester said Tuesday that he “had a nice meeting with her, and I’ll see how the hearing goes.” He said Ms. Raskin’s nomination had raised “no red flags as of yet.”

Biden’s Nominees

Profiles and related coverage of the president’s picks for Federal Reserve positions

Write to Andrew Ackerman at [email protected]

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Rachel Meadows

Rachel Meadows

Trending topics news writer who enjoys cooking, walking her dog and travel.