Senator Sees Yellen Boosting Fed's Oversight Of Banks

Bloomberg

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Senator Elizabeth Warren
Senator Elizabeth Warren

U.S. Senator Elizabeth Warren said she anticipates Janet Yellen will be a more aggressive financial regulator than Ben S. Bernanke when she succeeds him as chairman of the Federal Reserve Board.

"Yellen is making commitments in the direction of saying she understands the problem, she sees the problem, she knows what the tools are. I'm hopeful that means she's going to act," Warren, a Massachusetts Democrat, said of the Fed's regulatory duties in an interview on Bloomberg Television.

The Senate voted 56-26 on Jan. 6 to confirm Yellen, the Fed's vice chairwoman. She will become the 15th Fed chair and the first woman to head the central bank in its 100-year history.

Warren said she is "optimistic" about Yellen's approach to financial regulation, particularly with big banks. She said she would give a "mixed grade" to Bernanke's chairmanship.

"It's very uneven," Warren said. "There have been places where Bernanke has done a good job. Regulation has obviously not been a place where he has concentrated and done what the Fed needed to do to help bring under control the too-big-to-fail banks."

Yellen, 67, will take over as the Fed trims monthly bond purchases in a first step toward lessening the unprecedented economic stimulus commenced under Bernanke's leadership. His second four-year term expires on Jan. 31. Warren, 64, was among Democratic lawmakers who urged President Barack Obama to choose Yellen as Bernanke's successor, rather than former Treasury Secretary Lawrence Summers.

Warren also raised questions about a prospective replacement for her as the Fed's vice chairman and criticized JPMorgan Chase chief executive officer Jamie Dimon.

Former Bank of Israel Governor Stanley Fischer will be Obama's nominee for vice chairmanship, according to a White House statement today in which Lael Brainard and Jerome Powell were also named as nominees for seats on the Fed's Board of Governors.

Warren said she isn't sure Fischer is "going to work in the right direction," without elaborating on her concerns.

Asked about Dimon, Warren said she is "waiting on him to demonstrate that understanding" of learning from past missteps.

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