(CNSNews.com) – Sen. Elizabeth Warren (D-Mass.) told CBS’s “Face the Nation” on Sunday that lifting the FDIC insurance cap on bank deposits is “a good move,” but the question is what should the new cap be.
“I think that lifting the FDIC insurance cap is a good move. Now, the question is, where’s the right number on lifting it? But recognize that we have to do this because these banks are underregulated, and if we lift the cap, we are requiring — or relying even more heavily on the regulators to do their jobs,” she said. “Because it means that the government is backing them up.
“Is it $2 million? Is it $5 million? Is it $10 million? Small businesses need to be able to count on getting their money to make payroll to pay the utility bills. Nonprofits need to be able to do that.
These are not folks who can investigate the safety and soundness of their individual banks. That’s the job the regulators are supposed to do,” the senator said.
Warren said that right now, the one who’s saving banks is the federal government.
“The point is, right now, the Treasury Department, the Fed, all of the government regulators, the FDIC, are trying to fire on all cylinders to try to figure out what they can do to prop up these banks, and the point I was trying to make is, the reason they’re doing this is because this whole tranche of banks has been underregulated for five years now,” she said.
“And people are very concerned about, when you lift the hood, what’s under the hood, since the regulators clearly have not been on top of their job. It’s the reason that I’m calling right now for changes in the Fed in its regulatory approach, and changes in Congress, so that we roll back the authorization to lighten those regulations and that we put some accountability on these bank CEOs,” the senator said.
When asked whether she’s currently talking to the White House about a proposal to lift the FDIC insurance levels, Warren said, “I don’t want to talk about private conversations, but I will say it is one of the options that’s got to be on the table right now.”
When asked whether she has confidence in Mary Daly, chief regulator for the San Francisco Federal Reserve, Warren said, “No, I do not. The Fed should have acted, both the San Francisco Fed and the Federal Reserve Bank.
“Remember, the Federal Reserve Bank and Jerome Powell are ultimately responsible for the oversight and supervision of these banks, and they have made clear that they think their job is to lighten regulations on these banks. We’ve now seen the consequence of this,” she said.
The senator said that all Federal Reserve Chairman Jerome Powell wants to do is lighten regulations on the banks, which is why she opposed him as chairman.
“I said he was a dangerous man to have in this position,” she said.
When asked if she worries that she’s sowing more distrust of the federal government at a time when we have a crisis of confidence, Warren said, “Well, what I’m doing is being honest about what’s gone wrong. I don’t think you build any trust at all if you don’t start with why it’s broken and who it is — excuse me — that is responsible for that.
“We need accountability for our regulators, who clearly fell down on the job, and that starts with Jerome Powell, and we need accountability for the executives of these large financial institutions. Look, there should be clawbacks for Gary (sic) Becker and the others who explode these banks. So you take back the bonuses and big salaries,” she said.
Warren said that the bill should pass.
“On both sides, there should be support for this, and we should also bar them from ever being in banking again. We do that with stockbrokers. We should do the same thing with banks,” she said.
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