"While you have met with these CEOs dozens of times … you have met with leading financial investor and consumer advocacy groups only six times in your six years at the helm of the Federal Reserve."

Washington, D.C. - U.S. Senator Elizabeth Warren (D-Mass.) wrote to Jerome Powell, Chair of the Federal Reserve System (Fed) regarding his cozy relationships with bank executives and their influence on Fed policy. Dozens of private meetings and conversations between Powell and big bank executives appear to have stopped progress on crucial banking reforms like increasing bank capital requirements, reforming bank executive compensation structure, and strengthening reviews of potential bank mergers.

Since 2018, Chair Powell has met or had private conversations with Jamie Dimon, CEO of JPMorgan Chase, at least 19 times. In the same period, Powell has also met with Larry Fink, CEO of BlackRock, 10 times and David Solomon, CEO of Goldman Sachs, nine times. Most recently, the Fed circulated a weakened bank capital requirements proposal following lobbying from major banks.

The Fed has also refused to join the broad effort to finalize compensation restrictions for bank executives, as required by Section 956 of the Dodd-Frank Act of 2010. However, 14 years after the bill's passage, Powell is primarily responsible for the Fed's refusal to join an multiagency effort to prohibit incentive-based compensation arrangements that encourage executives to take big risks to boost short-term bank profits.

The Fed has also failed to make progress on applying stricter review to big bank mergers. The 2023 string of bank failures made clear that regulators are not appropriately considering the effect of potential bank mergers on our financial stability. The Fed's approval of mergers has increased risks, but has been great for investors and wealthy executives like Mr. Dimon, who raked in an extra $1.5 million dollars after orchestrating JPMorgan Chase's acquisition of First Republic Bank in 2023. JP Morgan Chase made $3 billion from the acquisition.

Since taking on the role of Federal Reserve Chair, Powell has done big banks' bidding. For example, Powell championed the 2018 Dodd-Frank rollback that directly contributed to Silicon Valley Bank's (SVB) collapse. In a hearing last June, Powell committed to learning from SVB's collapse, yet a month later, walked back that commitment in a carefully-worded press release in which he refused to support the Basel III proposal to increase bank capital requirements.

Powell's leadership has manifested in a culture of corruption that has cast a shadow over the Fed's decision-making, and led to scandal after scandal. Under Powell, Federal Reserve officials made millions of dollars' worth of trades based on insider information. A Federal Reserve president gave a closed-door, off-the record briefing to Citigroup investors. Additionally, the Fed's watchdog, hand-picked by Powell, has failed to hold him or anyone else accountable for these scandals.

"Given Wall Street's ability and willingness to drown out the public interest on these issues, it is especially disappointing that your calendar is dominated by meetings with big bank CEOs," wrote Senator Warren.

Senator Warren is seeking answers by July 19, 2024 about Chair Powell's meetings with big bank CEOs, and whether these meetings included discussion of bank capital requirements, executive compensation reform, and bank merger guidelines.

Senator Warren has led extensive oversight efforts to hold the Federal Reserve accountable for various ethics, supervision, and regulation failures:

* In March 2024, in a bipartisan letter to the Federal Reserve's Office of Inspector General, Senators Warren and Scott (R-Fla.) called out the Fed IG's failure to hold officials accountable for violating Fed rules and fostering a culture in which severe conflicts of interests go consistently unchecked.

* In July 2023, United States Senator Elizabeth Warren (D-Mass), Chair of the Senate Banking, Housing, and Urban Affairs Subcommittee on Economic Policy, and Senator Rick Scott (R-Fla.) sent a letter to Mark Bialek, Inspector General (IG) of the Federal Reserve (Fed), highlighting his inherent conflicts of interest and the need to make the position a Presidential-appointed, Senate-confirmed role.

* In May 2023, chairing a hearing of the Senate Banking, Housing, and Urban Affairs Committee Subcommittee on Economic Policy, Senator Elizabeth Warren (D-Mass.) questioned Federal Reserve Inspector General Mark Bialek and a panel of academic experts on the independence of the IG office and the regulatory and supervisory failures that contributed to Silicon Valley Bank's collapse.

* In May 2023, Senators Warren and Rick Scott (R-Fla.) sent a letter to Federal Reserve (Fed) Inspector General (IG) Mark Bialek, reiterating the need to make his position a presidentially-appointed, Senate-confirmed role to provide greater accountability at the Fed.

* In May 2023, Senator Warren sent a letter to Mark Bialek, IG of the Federal Reserve, rebuking him for his failure to hold Fed Chair Powell and senior Fed officials accountable for major ethics breaches, and the IG's sham investigation of the Fed trading scandal, both of which undermine his recommendations for strengthening the Fed's disturbingly weak ethics rules.

* In May 2023, Senator Warren and John Kennedy (R-La.) sent a letter to the Fed IG, inviting him to testify at their hearing on the Fed's role overseeing Silicon Valley Bank (SVB) before its failure and to consider legislative reforms that strengthen transparency and accountability at the Fed.

* In April 2023, following the Fed's report on SVB's failure, Senator Warren released a statement calling on the Fed to immediately adopt stricter bank oversight and called out Chair Powell's failure to supervise and regulate banks that posed a systemic risk to the economy.

* In March 2023, Senator Warren and Thom Tillis (R-N.C.) led a bipartisan group of senators to reintroduce the Financial Regulators Transparency Act, bipartisan legislation that would subject regional Federal Reserve Banks to the Freedom of Information Act (FOIA) and ensure their responsiveness to congressional and public information requests.

* In March 2023, Senators Warren and Rick Scott (R-Fla.) introduced bipartisan legislation to require a presidentially-appointed and Senate-confirmed Inspector General to the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection.

* In March 2023, Senator Warren led 11 senators in a letter to Fed's Vice Chair for Supervision, Michael Barr, calling on him to exercise the Fed's authority to apply stronger regulation and supervision to banks with assets totaling $100 to $250 billion.

* In March 2023, Senator Warren sent a letter to Fed Chair Powell, criticizing his leadership failures at the Fed that directly contributed to the failures of SVB and Signature Bank, and the significant risk to the banking system and the economy unleashed by those collapses.

* In March 2023, Senator Warren delivered a speech on the Senate Floor about the failures of SVB and Signature, spoke about her new legislation, the Secure Viable Banking Act, which would reverse the mistakes that Congress and President Trump made with rollbacks of Dodd-Frank

* In March 2023, Senator Warren called on Chair Powell to recuse himself from the Fed's review of the SVB failure.

* In December 2022, Senator Warren and then-Senator Pat Toomey (R-Pa.) introduced the bipartisan Financial Regulators Transparency Act, legislation that would strengthen Federal Reserve accountability and ensure that no financial regulator can withhold critical ethics-related information from Congress.

* Senator Warren has previously sent letters to Chair Powell on November 7, 2022, August 11, 2022, January 10, 2022, December 7, 2021, and October 21, 2021, and requested that the Fed publicly release additional information about its trading scandal, but the Fed has failed to adequately respond.

* In May 2022, Senator Warren also secured ethics commitments from Michael Barr, who was ultimately confirmed as Fed Vice Chair for Supervision.

* In February 2022, Senator Warren secured significant ethics commitments from several Fed Board nominees, including: Dr. Lael Brainard, nominee to serve as Vice Chair on the Federal Reserve Board, Sarah Bloom Raskin, nominee to serve as Vice Chair for Supervision on the Federal Reserve Board of Governors, and Drs. Lisa Cook and Philip Jefferson, nominees to serve as members of the Board of Governors. Bloom Raskin, Cook, and Jefferson agreed to a four year recusal period from matters which they oversee on the Board of Governors, not to seek a waiver from these recusals, and not to seek employment or compensation from financial services companies for four years after leaving government service.

* In January 2022, Senator Warren called on Chair Powell to immediately release information related to Fed officials' trades and changes to the Fed's ethics policy after new and troubling revelations about then-Vice Chair Richard Clarida's trades in March 2020.

* As the ethics scandals involving top level Fed officials unfolded in September and October of 2021, Senator Warren called out the culture of corruption at the Fed and raised deep concerns over conflicts of interests that have undermined public confidence in the Federal Reserve System.

* In an October 2021 speech on the floor of the Senate, Senator Warren called out the culture of corruption among high-ranking Fed after recent reports of ethically questionable financial activity by high-ranking Fed officials, including then-Vice Chair Clarida and two regional Fed presidents.

Read this original document at: https://www.warren.senate.gov/newsroom/press-releases/warren-slams-powell-for-cozy-relationship-with-bank-executives-weak-banking-rules