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Republicans grill Fed nominee Raskin over past views on climate and big energy companies

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Sarah Bloom Raskin, vice chairman for supervision and member of Federal Reserve Board of Governors, gesticulates during the confirmation hearing of Senate Banking, Housing and Urban Affairs Committee on Capitol Hill, Washington, D.C., U.S.A, February 3, 2022.

Ken Cedeno | Reuters

The Senate Republicans asked the nominee to the Federal Reserve’s top banking watchdog Thursday questions about whether or not she would direct the institution toward climate change.

President Joe Biden put up Sarah Bloom RaskinThe post of Vice Chair for Banking Supervision, which is arguably the most significant regulator in the industry, was created.

Although Raskin stated that she would not allow the Fed to be “in the business” of selecting winners or losers based on previous statements from her, the Senate banking panel was skeptical.

“With respect to Mrs. Raskin I have to admit that this is one the most extraordinary cases of confirmation transformation I’ve ever seen,” said ranking Republican Sen. Patrick Toomey, Pennsylvania.

Toomey specifically referred to the commentary pieces Raskin wrote about allocating capital from fossil fuels companies. The May 2020 issue of The New York Times, titled “Why Is the Fed Spending So Much Money on a Dying Industry?”Raskin advised the central bank not to use its emergency lending capabilities, which were used at the outset of the Covid-19 epidemic in an effort to aid big energy companies.

Rasking said then that climate change is threatening financial stability. Addressing this can lead to economic opportunity and increased employment. “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.”

Raskin denied that her writings implied she would encourage banks to not lend money to fossil fuel firms.

Officials from the Fed have stated that they work with banks to improve their plans to account for financial consequences of climate-related events. These provisions are not currently being considered for stress testing large institutions.

Raskin explained that the Federal Reserve is not authorized to intervene in favour of one sector. It is something I consider to be outside the laws. Congress established the Federal Reserve with specific mandates. As a lawyer, I adhere to those mandates.

Also, the hearing was held to question economists Lisa Cook and Philip JeffersonBiden nominated a number of other people to fill the vacant seats on Fed’s Board of Governors.

Cook faced particular questions about her views on inflation, and on her resume. Sen. Bill Hagerty of Tennessee accused Cook, who was a Republican, of embellishing it.

Toomey stated that today’s hearing was not about just vetting them. “It really is about the Fed’s independence and whether/not we’re going to abandon one core part of our democracy.

However, Sen. Sherrod B. Brown, D. Ohio, chaired the committee and said that Republican criticisms had been politically motivated. He noted that Raskin has been a Fed Governor before and has passed previous confirmation hearings without any problems.

Brown stated that “we have witnessed a coordinated effort of some to portray her as radical.” Brown said, “That description requires a suspension or common sense.”

Expect the vote of this committee the nominationsTogether with Jerome Powell (current Fed Chair) and Lael Mindard (a governor Biden wants to nominate to Vice-Chair later in the month), he also mentioned this.

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