Warren pushes Powell to tee up Basel vote

Bloomberg News

WASHINGTON — Sen. Elizabeth Warren, D-Mass., called on Federal Reserve Chairman Jerome Powell to convene a vote on the central bank's proposed Basel III endgame capital rules by the end of the month.

In a letter to Powell sent on Monday, Warren cites a report from The Wall Street Journal that outlines a series of meetings between Powell and JPMorgan CEO Jamie Dimon, as well as other CEOs of large banks, that influenced Powell's thinking on the Basel III endgame proposal, which would raise capital requirements for those banks. 

"This is a highly disturbing turn of events," Warren said. "Your opposition to the Basel III rules is not new. But it now appears that you are directly doing the bank industry's bidding, rewarding them for their extensive personal lobbying of you. 

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"Instead of doing Mr. Dimon's bidding, you should do your job and allow the Board to convene for a vote on a 16% capital increase by June 30th, as global regulators determined was necessary to prevent another financial crisis," Warren said.

Warren also made a point of Powell's seeming disagreement with the Fed's vice chair for supervision, Michael Barr, who has led the Fed's rulemaking process on Basel. 

While Barr has defended the proposals — which have received fierce pushback from the banking industry — Powell has been more open to criticism of them. In March, Powell told lawmakers that expects the proposal will go through "broad and material change," and Republican lawmakers have pleaded with Powell to nix Barr's proposal. 

"Vice Chair Barr supports the current iteration of the Basel rule — and your actions to overrule him are not consistent with the intent of the law," Warren said.