elizabeth warren

Randal Quarles, President Donald Trump’s nominee for Federal Reserve Vice Chair of Regulation, a position created after the financial crisis, took a lot of heat from Senator Elizabeth Warren in a hearing Thursday for what she described as “a 30-year career spinning through the revolving door in the private sector.”

Quarles, a former Wall Street lawyer and Treasury official, was visibly shaken as Warren dug into him with all the details of his career that appeared to go against the role he’s now tasked to take on.

With characteristic swagger, Warren didn’t hold back.

“After the 2008 crisis Congress put the Fed in charge of supervising the biggest banks and created a new position, the vice chair for regulation, that was supposed to lead that effort,” Warren said. “That means if you’re confirmed to this position Mr. Quarles, you’ll have more influence than any other person over the regulation of the big banks.”

She continued, “Now, given that enormous power, the number one thing we need from the Fed’s vice chair for supervision is a demonstrated willingness to stand up to the interests of the big banks that threaten the financial institutions.  But when I look at your 30 year career spinning through the revolving door in the private sector Mr. Quarles, I just don’t see it.

And the attack didn’t stop there. “You’ve got 15 years representing big banks at a New York law firm working on some of the mergers that created the too-big-to-fail banks that we have today,” Warren pointed out. “You have two stints at the Treasury Department including shortly before the 2008 crisis where you insisted the banks were well capitalized enough to survive a housing downturn, it turns out they weren’t, and more than a decade in private equity and investment management where you’ve argued repeatedly for weaker rules for the biggest banks.”

Her conclusion? “That’s not a track record that should give Americans a whole lot of confidence in you.”

To Warren’s credit, Quarles written testimony, while short, did indicate he intends to be a loyal soldier to Trump’s mandate to roll back post-crisis regulations known as Dodd-Frank.

“As with any complex undertaking, after the first wave of reform, and with the benefit of experience and reflection, some refinements will undoubtedly be in order,” he said.

Pressed for more details, Quarles echoed a long-standing Wall Street talking point that banks should get to know more details about the Fed’s bank stress tests than are currently divulged. Regulators and finance experts this would make the tests even more like a take-home exam, allowing too-big-to-fail banks to game the results. 

SEE ALSO: Meet Trump’s designated driver of Wall Street deregulation

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