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Press Release | April 26, 2023

Memo To Reporters: What The Fed's Self-Investigation Must Explore To Be Credible

Federal ReserveFinancial RegulationRevolving Door
Memo To Reporters: What The Fed's Self-Investigation Must Explore To Be Credible

FOR IMMEDIATE RELEASE

Contact: Max Moran, moran@therevolvingdoorproject.org

Ahead of the Federal Reserve’s forthcoming report on its own regulatory and supervisory failures, the Revolving Door Project poses several questions in a memo to the press which the report must answer to be considered credible. 

The Fed report is being written by Vice Chair for Supervision Michael Barr, whose own failures ought to be among the report’s focuses. Moreover, it was commissioned by Federal Reserve Chair Jerome Powell, who supported a 2018 bank deregulation law and the further regulatory rollbacks under Barr’s predecessor, Randal Quarles. This calls into question whether the report can, on its face, be considered a credibly independent, thorough examination of the Fed’s failures.

The Fed report, due to be released on Friday, is meant to explain what went wrong with the Fed’s regulation and supervision of Silicon Valley Bank (SVB), which was taken into receivership in March after a dramatic bank run. SVB’s 48-hour collapse was the second-largest bank failure in American history.

“The joke goes that if you want everyone in Washington to forget about something, you write an official report about it,” the Revolving Door Project memo states. “This is true at any institution, but given the multiple ethics scandals at the Powell Fed, and the Fed’s decades-long obsession with controlling its public perception, it would be foolish to take the forthcoming Barr report purely at face value. The public deserves a genuinely independent investigation of the Fed’s failures to regulate and supervise SVB.

Read the Revolving Door Project memo here.

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Federal ReserveFinancial RegulationRevolving Door

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