Earlier this month, Sen. Mark Warner (D-VA) questioned Biden nominees on the Basel III revisions during a Senate Banking Committee hearing.
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NewsTranscript
00:00That's Senator Warren of Virginia's recognition.
00:02Thank you, Mr. Chairman.
00:02Let me actually pick up where my friend from South Dakota.
00:06As somebody, unfortunately with some,
00:10to some folks on my side of the dais,
00:12I was up to my eyeballs in 2155.
00:15So if you need intent suggestions,
00:20I'd be happy to share those with you.
00:24But I also got-
00:25On a bipartisan basis.
00:26On a bipartisan basis.
00:27Although, you know, we ought to go to the,
00:29she ought to go first to the people
00:31who took the most grief for that.
00:33And I also think, you know, your comment,
00:35Ms. Goldsman-Thorne-Merrill,
00:37Commissioner, on Basel III was appropriate,
00:40absolutely appropriate.
00:41And the fact that you think, you know,
00:44you've not been told about,
00:46just as we've not been told about
00:47what the reworkings are gonna be
00:49and whether that needs to be fully reissued
00:53or additional comment period.
00:54I mean, I think it would be irresponsible
00:56to make a judgment when you, just like me,
00:59has not seen the revisions yet.
01:01So I think, and based on our conversations,
01:05you understood the complexity of this issue.
01:08And, you know, we all think
01:12how we deal with Basel III's terribly,
01:15the endgame, terribly important.
01:16And, you know, having the full economic analysis out,
01:19the chair, Chair Powell, committed to that yesterday,
01:22and making sure whatever direction we had,
01:26that it works in harmony with already existing standards,
01:30I think is really important.
01:31I appreciate the way you've addressed this.
01:33And I know members have already asked this,
01:35but I want to go at it again,
01:37since it appears some of my colleagues have questions
01:39about, you know, your background experience.
01:42I think you've got the right background.
01:44I think you've got the right experience.
01:47You know, but the truth is, you know,
01:49FDIC's a large entity.
01:52It is very complicated.
01:55And you're gonna have a challenge to,
01:59you know, both keep the trains running on time,
02:03and, you know, not move away from your critical
02:07financial supervisory role.
02:09So can you give us a little bit of outline,
02:12recognizing you're not there yet,
02:13but can we look at 30-day metrics, 60-day metrics,
02:1690-day, you know, what are the things
02:18that we could see from you,
02:20particularly on the culture change,
02:22that, you know, I hope you can be confirmed,
02:25that we could look back and say,
02:27well, did she do what she said as she came into this role?
02:31Yeah, thank you, Senator.
02:32I appreciate the opportunity to address that.
02:34So I think there's gonna be some immediate things
02:36that need to take place in that.
02:38The first of that is making sure
02:39that there's the right process in place.
02:41Because there was confusion in the process,
02:43and also making sure employees feel safe,
02:45and all the managers are encouraging people
02:49to use that process.
02:50Otherwise, if you don't have a process in place,
02:53that people trust,
02:54then, you know, management does not know what's going on,
02:57and can't fix the problem.
02:58So that's one of the first things
02:59that would need to be fixed.
03:01I think this issue of field offices and fiefdoms,
03:05that's gonna take a little bit longer, I would say.
03:08You know, as I said,
03:10before we had field offices at SIGTARP,
03:12and I made sure, I did a number of things
03:13to make sure that all the offices were operating
03:15in the exact same way,
03:18in terms of conduct and professionalism,
03:20but also in terms of substance,
03:22and what they're doing.
03:22We can't have offices moving in a different direction
03:27than, for example, what the policies,
03:29and practices, and procedures allow.
03:31So that's gonna be a larger issue.
03:34I think there's definitely gonna be accountability,
03:37and that might take a little bit of time,
03:39but we wanna do it right.
03:41We wanna make sure we go in and right the ship.
03:44And then there's really just this issue
03:47of modernizing culture, and modernizing ideas,
03:50changing litigation adverse mentality.
03:53I think we could do some things right at the beginning
03:56to start with that,
03:56but these are deep-seated, fully ingrained issues.
04:00Some of changing the whole culture
04:01is gonna take a bit of time,
04:03but we also, we can't take a ride off the ball
04:07of the mission.
04:08And so, you know, we had bank failures in spring 2023.
04:11We've gotta make sure that everyone's in position,
04:14and can be focused on mission.
04:16And I, again, agree with the chairman.
04:20This was not a problem at the FDIC that happened overnight.
04:23It is gonna take time, but I'm, you know,
04:25my hope would be we'd see a 90-day plan,
04:28180-day plan, and some of the things
04:30that we can look at at metrics.
04:32I'm gonna get one more question to you, Commissioner,
04:37but I do wanna say, just crunched off of the record,
04:40I'd love to both compliment what, frankly,
04:42Jay Clayton started on human capital disclosure,
04:44and I know you've been active on that as well,
04:47and I wanna make sure we continue that good work.
04:49An issue that my colleagues have heard me
04:53come back to repeatedly is better utilization
04:56of the discount window.
04:58Chair Powell in the House yesterday was saying,
05:00you know, the fact that they sometimes publish folks
05:05ends up creating that stigma.
05:06I just, if you get, when you get in,
05:09and you come to the same conclusion
05:10that discount window needs to be better utilized,
05:13and we need reforms, will you continue to work
05:16with Chair Powell, me, and others who care
05:18about this underutilized tool?
05:20Absolutely, I care about it, too.
05:22I mean, in times of crisis, banks need liquidity,
05:24and they need it fast.
05:25We saw liquidity dry up very quickly in the crisis,
05:28and that's actually what led
05:30to the Troubled Asset Relief Program, or TARP.
05:32So we don't wanna be in that same position again.
05:34So these ideas on taking away the stigma
05:36of the discount window, and then making sure
05:38banks are ready to use it, that they can potentially
05:41pre-pledge collateral, and that they know how to use it,
05:46I think that's worth taking the time to do.
05:48Thank you, thank you, Mr. Chairman.
05:49Thanks, Senator Warner, Senator Tillis.