Sen. Warren Says New York Fed Pick Should Testify Before Senate Ahead of Appointment -- Update
March 26 2018 - 6:44PM
Dow Jones News
By Nick Timiraos and Michael S. Derby
U.S. Sen. Elizabeth Warren (D., Mass.) said Monday that John
Williams should testify before the Senate Banking Committee before
being approved as the next president of the Federal Reserve Bank of
New York.
The Wall Street Journal reported Saturday that Mr. Williams, who
now serves as leader of the San Francisco Fed, was the front-runner
to become the New York Fed chief, one of the top jobs in the
central bank system.
The selection is subject to approval by the Washington-based Fed
board of governors and doesn't require Senate confirmation. But Ms.
Warren called on the Fed board to withhold its assent until Mr.
Williams testifies before the banking committee, on which she
sits.
She questioned Mr. Williams's fitness for the job at the New
York Fed, which supervises some of the nation's biggest banks,
given the recent sales practice scandals at Wells Fargo & Co.,
which is regulated by the San Francisco Fed, among other agencies.
The Fed in early February placed restrictions on Wells Fargo for
failing to have proper risk controls in place that could detect
such issues. In an unusual move, it barred the bank from growing
past the $1.95 trillion in assets it had at the end of 2017. The
Fed cited "widespread consumer abuses" in its rebuke.
Mr. Williams's "track record raises several questions, including
about his fitness to supervise Wall Street banks given the San
Francisco Fed's inadequate supervision of Wells Fargo during its
many consumer scandals, " Ms. Warren said in a statement.
"If Mr. Williams is selected, the Fed's Board of Governors
should not approve his selection until Mr. Williams and the
co-chairs of the New York Fed's search committee testify before the
Senate Banking Committee about his qualifications and the process
that led to his selection."
The Fed board, as well as the New York and San Francisco Fed
banks, declined to comment.
The New York Fed's board of directors has recommended Mr.
Williams for the job, according to people familiar with the matter.
The search was run by directors who don't work for Fed-regulated
banks.
The New York Fed president plays a key role in crafting and
implementing the central bank's monetary policy and is its main
point of contact with financial markets. This has caused some
critics of the selection process to say it should be more open to
public scrutiny and input, and the appointment should be subject to
Senate confirmation.
Atlanta Fed President Raphael Bostic welcomed reports that Mr.
Williams was the leading candidate for the New York Fed job.
Messrs. Bostic and Williams were classmates while they completed
their graduate course work in economics at Stanford University. Mr.
Williams earned his Ph.D. degree in 1994, one year before Mr.
Bostic.
"I've known him for a long, long time...He is smart. He has been
an innovative manager, and he's been a great colleague," Mr. Bostic
said in an interview with The Wall Street Journal. "The New York
Fed would be very lucky to have him."
Write to Nick Timiraos at nick.timiraos@wsj.com and Michael S.
Derby at michael.derby@wsj.com
(END) Dow Jones Newswires
March 26, 2018 18:29 ET (22:29 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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