Rounds Accuses Fed Vice Chair Of Fostering A Culture That's ‘Misogynistic, Patriarchal, And Outdate’

6 months ago

On Thursday, Sen. Mike Rounds (R-SD) questioned Federal Reserve Vice Chair Michael Barr on oversight and accountability during a Senate Banking Committee hearing.

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Transcript

00:00 Senator Kournasmas will send around to South Dakota is recognized.

00:02 Thank you, Mr. Chairman. Mr. Greenberg.

00:05 Yesterday, my House colleagues and today my Senate colleagues

00:11 have all been taking you to task on how under your 19 year tenure,

00:18 you have failed to protect employees and create a culture of professionalism

00:23 at the FDIC.

00:27 Instead of your age, instead of that, your agency is known as a place

00:32 that fosters a culture that is, in their words, misogynistic,

00:37 patriarchal and outdated,

00:41 a place where favoritism is common and senior executives

00:45 with well-known reputations of inappropriate workplace behavior

00:49 enjoy long careers with no consequences.

00:55 You, in fact, are one of those senior executives

00:58 who have subjected employees to bullying and your explosive temper,

01:03 which are detailed in multiple pages of this report.

01:08 Ninety one, ninety two, ninety three, ninety four

01:12 are all included.

01:15 And yet you have faced no consequences.

01:18 Culture starts at the top.

01:24 Now, those aren't my words, Mr.

01:26 Chair, those are the words of the employees at the FDIC,

01:31 and you can read that on page six of the report.

01:34 Your employees clearly have no faith

01:40 that you can meaningfully lead for changes at the FDIC.

01:46 And quite frankly, neither do I.

01:50 I think that you should resign

01:54 for the good of the institution.

01:57 Mr. Barr, in agreement with the chairman Powell,

02:05 you have stated on page five of your written testimony

02:09 that you expect a series of broad material changes

02:13 to the Basel three endgame proposal.

02:15 I think myself and many members of this committee would welcome that.

02:22 Do you agree that each section of the proposal

02:25 covering all three risk stripes of the market risk,

02:28 operational risk, credit risk, that they need broad

02:33 and material revisions based on the comments that you have received?

02:36 Yes, I think if you look across all three areas,

02:40 I do expect some significant changes in the proposal.

02:43 And by definition, the material mean material

02:47 in this particular case does mean significant change.

02:50 Would you say the commenters that have made and I think

02:53 and there's been a lot of comments made,

02:55 do you think you'd be able to anticipate

02:57 all of the potential changes that you're considering?

03:00 We're going through the substantive work now, if we find an area

03:04 where the Administrative Procedures Act would suggest

03:08 that we haven't met that standard, that would be one of the factors

03:10 we'd think about about process going forward.

03:13 But but right now, we really are just focused on the substance,

03:16 making sure we get the substance right.

03:19 And then we'll turn to the question of what's the right next step in the process.

03:23 But fair to say, and I believe probably 97 percent of all of the comments

03:29 that you receive were not favorable to the proposal that you were making.

03:34 And the vast majority of them wanted you to simply eliminate it

03:37 or they wanted substantive, significant changes

03:40 within those proposed regulations.

03:43 Would that be fair to say?

03:45 I haven't done that calculation.

03:47 I've heard that number reported before, but I haven't myself looked at that.

03:50 Naturally, the reason why I'm asking the question and I think you're on it

03:54 is that you may very well have to withdraw

03:58 and repropose that proposed regulation if these are significant changes

04:05 so that there could be other comments made in the future.

04:08 Would you agree with that?

04:10 As I said, we haven't reached the question yet of what the right process is.

04:15 We're really focused on the substance.

04:17 We're working our way through that.

04:18 After we reach a conclusion about the substance, we'll turn to the question

04:22 of what the appropriate process is from that from that point on.

04:26 But you do expect, as I think both you and the chairman have indicated,

04:30 that you would probably have significant changes to the proposal.

04:35 Yes, Chair Powell and I both said we expect broad material changes.

04:39 And I noticed that you indicated that that would require

04:43 it would trigger additional administrative

04:45 or actions under administrative procedures at this time.

04:48 What I said, Senator, is that we haven't made any decision about the process.

04:53 We'll follow the Administrative Procedures Act.

04:55 We'll take care of whatever the appropriate process is.

04:58 But we haven't reached any judgment about the process at this time.

05:02 OK, and then just I'm just curious.

05:04 I think yesterday with the House Financial Services Committee,

05:09 you indicated that policy changes to the proposal,

05:13 just as you've indicated here today, they haven't been finalized yet.

05:16 But as you go through and you're trying to identify this,

05:19 has there been a framework or a term sheet

05:24 or some sort of of a layout laying out the differences

05:29 or the contours to changes that other agencies that you're working with

05:33 that they've been able to see and to work over?

05:35 We're working very closely.

05:37 I'm working very closely with my sister agencies at the FDIC and OCC

05:43 on a set of reforms to that proposal and also in discussions with my board.

05:48 If you do have that, would that be available to this committee for review as well?

05:52 That's not a normal process that we would conduct.

05:56 We go through the process among the agencies.

05:59 We develop whatever substantive proposal we are and we put it out

06:03 for the public to comment.

06:04 And then, of course, we welcome, as we have in this instance,

06:08 comments from senators and from members of the House.

06:12 Those comments that we get from this committee and from others

06:16 are part of the comments that we review when we evaluate our proposal.

06:21 Well, most certainly a substitute of this may be for changes.

06:24 It seems like it would be appropriate for this oversight committee

06:27 to at least have access to the questions that you may very well be asking

06:30 other committees, or at least if there is a working

06:34 worksheet of some sort, it seems that that would be fair game

06:37 to at least share with us as well.

06:39 Senator, as I said, the normal process here in administrative rulemaking

06:43 is to conduct it the way we're conducting it.

06:45 And I expect we are going to continue to conduct it

06:48 according to the normal process.

06:50 Thank you. Thank you, Senator.

06:52 Senator Warren.

Rounds Accuses Fed Vice Chair Of Fostering A Culture That's ‘Misogynistic, Patriarchal, And Outdate’

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