Elizabeth Warren and Rick Scott join forces against the Fed’s inspector general.
Sens. Warren and Scott Demand Transparency from Federal Reserve Inspector General
Sens. Elizabeth Warren (D-MA) and Rick Scott (R-FL) are taking steps to tighten oversight on banking regulators by demanding transparency from the Federal Reserve’s inspector general. In their bipartisan effort, they introduced legislation to make the top watchdog position Senate-confirmed, arguing that the current lack of independence compromises its effectiveness.
To push for this change, Warren and Scott sent a letter to Federal Reserve Inspector General Mark Bialek, requesting that he disclose his salary for the past five years. They expressed concerns about potential conflicts of interest, as the inspector general’s salary is partly based on bonuses earned by other Fed employees.
“Because the Fed Inspector General’s salary is in part based on the bonuses earned by other Fed employees — there is a structural, financial incentive for the IG to overlook or downplay wrongdoing by those Fed officials,” Warren and Scott wrote in the letter.
The letter also asked Bialek to provide information on the percentage of his salary tied to the average bonus component of the pay formula and whether he had investigated Fed bonuses in the past five years.
A spokesperson for the inspector general’s office confirmed the receipt of Warren and Scott’s letter and stated that they are currently reviewing it. They declined to comment further until the review process is complete.
When asked about bipartisan support for their efforts, Scott expressed confidence, highlighting the significant financial losses incurred by the Fed and the misallocation of capital caused by their actions.
“I think there’s a lot of interest up here in reining in what the Federal Reserve is doing. They were never set up to be buying long-term securities and government-backed bonds,” Scott said. “And so I think there’s a lot of interest up here in holding them accountable.”
Lawmakers from both parties have pledged to crack down on banks and banking regulators following the recent shutdowns of Silicon Valley Bank and Signature Bank, which had a significant impact on financial markets.
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