Brad Sherman Slams FDIC For Workplace Toxicity: These Reports ’Show A Horrendous Picture’

3 months ago

Earlier this month, Rep. Brad Sherman (D-CA) questioned officials on FDIC workplace toxicity reports during a House Financial Services Committee hearing.

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Transcript

00:00The gentleman from California, Mr. Sherman, is recognized for five minutes.

00:05Thank you.

00:08We've got a problem since the 1980s.

00:11The reports, I won't repeat, just because they've been stated so often, but

00:17they show a horrendous picture.

00:19And now we are close to, well, I can't say solving.

00:26But to making this agency as good as it can be,

00:31as far as its workplace culture.

00:34I wanna commend the law firm for its report.

00:38I wanna commend the Wall Street Journal for

00:41really forcing that report to be commissioned.

00:45And now we are so close, Greenberg is resigning.

00:50Biden is going to appoint a successor.

00:57And I wanna call upon the administration to appoint a successor as soon as possible.

01:04But I want the Republican members of this committee to take the opportunity

01:09to demand that the Senate not engage in dilatory tactics

01:14to prevent that successor from being confirmed.

01:17A prompt hearing, and then an up or down vote without any of the Senate tricks.

01:24Because I was one of those who asked for this hearing.

01:29But that was before Greenberg announced his retirement.

01:32The title of this hearing is about the toxic workplace culture at the FDIC.

01:39If the Senate unduly delays the confirmation, we need another hearing,

01:42Mr. Chairman, on the Senate's toxic culture of delay.

01:48Which would be preventing us from dealing with the toxic culture at the FDIC.

01:54Now, some have argued that somehow Signature Bank and

01:59First Republic are a result of Greenberg's temperament.

02:04Mr. Hugh, you were there.

02:06Did these banks fail because they had bad management?

02:10And they failed to account for interest rate risk?

02:13Or did they fail because of Greenberg's personality?

02:19Thank you for the question, Congressman.

02:21So the OCC does not regulate Silicon Valley Bank?

02:24Yes, I'm asking you in your role as a member of the FDIC.

02:30So the factors that led to the failures are well laid out

02:36in the reports that the FDIC has-

02:38Do any of those reports say it's Greenberg's personality?

02:44That's not mentioned.

02:45And has anyone, you're on the FDIC,

02:50has anyone at the FDIC identified for you,

02:55I was going to bring this First Republic issue up or Signature Bank up, but

03:00I failed to bring it up because I was worried about the chairman's personality.

03:03Has anybody stepped forward then and said the personality stopped them from taking action?

03:09No.

03:11The National Treasurer Employees Union represents the FDIC employees.

03:15I wonder whether Mr. Hsu and Mr. McKeon can commit to working with

03:23the NTEU as the FDC moves forward to improve its workforce culture.

03:29Mr. Hsu?

03:31Yes.

03:32Yes.

03:33Good.

03:34I would point out that there are 6,600 employees that deserve a good workplace culture.

03:47But there are 330 million Americans that deserve good bank regulation.

03:53And if we see a, if Mr.

04:00Grunberg resigns before his successor is confirmed,

04:05the FDIC could be split two to two.

04:09Mr. Hsu, if the FDIC was split two to two and we had another big crisis,

04:16Silicon Valley Bank Two, is it possible that the FDIC would split

04:21two to two as to what action to take if they only had four commissioners?

04:26It's hard to speculate about that.

04:29But there's a reason why you have an odd number of commissioners,

04:33correct? It's so that you're less likely to split two to two.

04:38I don't want to speculate about that.

04:40Okay. Well, I won't ask you to speculate, but last I checked, two plus two was four.

04:45If you have only four members, then it can divide two to two.

04:50I'd finally point out that Silicon Valley Bank also failed because interest rate risk

04:57was not built into sufficiently our bank examination process.

05:03And we need to mark to market all long-term instruments,

05:08debt instruments that banks hold, whether it is available for sale or held to maturity.

05:14And until we do that, we will see banks put too much of their money on Wall Street instruments.

05:19I yield back.

Brad Sherman Slams FDIC For Workplace Toxicity: These Reports ’Show A Horrendous Picture’

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