Fed nominees pledge not to participate in the finance revolving door.

Three of President Biden’s nominees to the Federal Reserve pledged to lawmakers that, if confirmed in their positions, they would not wo...


Three of President Biden’s nominees to the Federal Reserve pledged to lawmakers that, if confirmed in their positions, they would not work in financial services for four years after leaving the Fed.

The engagement comes amid growing concerns over the revolving door between Washington and Wall Street.

The three potential Fed governors in question — economists Lisa D. Cook and Philip N. Jefferson and longtime civil servant and lawyer Sarah Bloom Raskin — said they would “pledge not to seek employment or remuneration” with a financial services company after their departure. the board of directors, which oversees the largest banks.

Their promises were made at the request of Senator Elizabeth Warren, the Massachusetts Democrat who has criticized the so-called revolving door between government and finance. Fed officials routinely go to work for Wall Street after leaving the institution, making the commitment notable.

“These are the highest ethical standards ever accepted by candidates for the Federal Reserve Board,” Ms. Warren said in a statement Wednesday. “American senators and the American people can be confident that these officials will make sound economic policy decisions in the best interest of the public.”

Republicans questioned Ms. Raskin’s appointment highlighting her stint on the board of a fintech company, Reserve Trust.

The company obtained a critical account with the Fed – known as the main account – while Ms Raskin served on the company’s board. The account offered the company advertising benefits, such as access to the Fed’s payment system.

While his confirmation hearing Before the Senate Banking, Housing and Urban Affairs Committee last week, senators questioned whether she had used her previous positions at the Fed and Treasury to help secure the account. Ms Raskin neither confirmed nor denied whether she had been in contact with the company’s local federal bank while serving on its board.

The Federal Reserve Bank of Kansas City, which approved the main account, said he “did not deviate from its review process when evaluating this application.”

Sen. Patrick J. Toomey, Republican of Pennsylvania, asked Ms. Raskin to respond in writing by Wednesday about the Reserve Trust situation.

Ms Raskin, in her response, said she “does not recall any communication I made to assist Reserve Trust in obtaining a primary account. Had I done so, I would have complied with all applicable ethical rules in such communications.

Amanda Thompson, communications director for Republicans on the Banking Committee, called the responses a “case of selective amnesia.”

The White House continued to support its candidates. Christopher Meagher, a White House spokesman, called the Republican questioning a “smear” and said it “continues to fall flat in the face of scrutiny and facts.”

Dr Cook, Dr Jefferson and Ms Raskin are awaiting confirmation alongside Jerome H. Powell – whom Mr Biden reappointed to be Fed chairman – and Lael Brainard, a Fed governor who is the choice of the Biden administration for the vice presidency.

Sen. Sherrod Brown, an Ohio Democrat and chairman of the Banking Committee, said last week that the five nominees would face a key committee vote on Feb. 15.

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Newsrust - US Top News: Fed nominees pledge not to participate in the finance revolving door.
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