Bill Clark/Pool via AP
Sarah Bloom Raskin, nominee to the Federal Reserve Board of Governors, speaks during a Senate Banking Committee confirmation hearing, February 3, 2022, in Washington.
Five nominees to the Fed Board of Governors are pending (out of seven), giving President Biden the chance to make over America’s central bank. The most progressive, Sarah Bloom Raskin, will probably just squeak through, assuming the Senate Democrats get back to full strength.
Raskin has been nominated to the crucial post of vice chair for supervision. At the hearing of nominees Lisa Cook, Philip Jefferson, and Raskin last Thursday, the Republican knives were particularly out for Raskin.
Republican senators attacked her published writings urging the Fed to pay a lot more attention to the climate risks banks are incurring in their loan portfolios. But that is an entirely legitimate concern, one that Fed Chair Jay Powell has expressed in milder form.
The real anxiety is that Raskin, who previously served as deputy Treasury secretary and as a Fed governor during the Obama years, will be a tough and savvy regulator across the board. Senate Republican leader Mitch McConnell, following the hearing, singled out Raskin for attack in a floor speech.
There are reports that Republicans may try to separate Raskin from the other four Fed nominees as the price of letting the others get early confirmation. The clock is ticking, and the Fed will have a crucial vote on raising interest rates in March.
But the office of Senate Banking Committee Chair Sherrod Brown confirms to me that his committee will report out all five nominees next Tuesday as a group, and not allow them to be separated. My reporting suggests that none of the five centrist Democratic senators who sank the nomination of the progressive Saule Omarova to be comptroller of the currency are inclined to oppose Raskin.
Some Republicans were hoping that an alleged conflict of interest would sink Raskin. While out of government, she served on the board of a Colorado-based non-bank financial company, Reserve Trust, which was given direct access to the Fed’s payment system. When she left the company, she cashed out stock worth more than $1 million. Republican senators claimed that the company got favorable treatment after Raskin supposedly intervened with its regulator, the Federal Reserve Bank of Kansas City. However, the K.C. Bank, far from a shill for Biden or Raskin, has now thoroughly debunked that allegation, explaining how that access to the Fed system was a routine decision.
Meanwhile, Sen Luján’s office says the senator has been sitting up and speaking with his staff, and has no signs of aftereffects of his stroke. Let’s hope so.
It would have been far better for Biden to have delayed redesignating Republican Jay Powell as Fed chair until his other nominees were confirmed. But all five are now being treated as a group. That needs to include Sarah Bloom Raskin.
