Federal Reserve

Activists are pushing Fed vice chair Michael Barr and his deputy Kevin Stiroh to force the financial sector to take climate change seriously.

At the conclusion of the Kansas City Fed’s annual Jackson Hole Economic Symposium, Revolving Door Project Senior Researcher Kenny Stancil and Research Assistant Henry Burke released the following statement:

In advance of his Jackson Hole speech, the Fed chair has neglected his role of ensuring the safety and soundness of banks with substantial fossil fuel assets.

The Fed report is being written by Vice Chair for Supervision Michael Barr, whose own failures ought to be among the report’s focuses.

One of the flashing-red warning signs about SVB’s bad balance sheet was the huge cash advances it was taking out of the FHLBank system.

Despite years of our best advice, and indeed the better judgments of Sen. Elizabeth Warren and other progressives in Congress, government watchdogs like Americans for Financial Reform (AFR) and others, nearly one year ago President Joe Biden disappointed his responsibility to the public and to his own economic agenda by renominating Donald Trump’s hand picked head of the Fed: Jerome Powell. Biden bafflingly stuck by Powell despite his years of betraying labor unions, environmental groups and frontline communities, and the middle class. As a result, broad coalitions of folks concerned about the climate crisis, about the long term safety and stability of our financial system, about attacks on labor and the working class, about housing insecurity and the long term impacts of the pandemic, mobilized against Powell’s renomination because his storied track record of, well, making each of these things (and more!) worse.

As of now, Barr is assigned to investigate supervisory failures that occurred under his watch featuring a bank that catered in particular to the crypto and fintech industries which Barr was so active in immediately prior to revolving back into government. Barr is a walking conflict of interest. His central role in the investigation is damning

His defense of HAMP is that his hands were tied, but he seemingly went out of his way to handcuff himself.

Insider-trading can’t keep Powell’s right-hand man from becoming CNBC’s new favorite expert.

The conflict of interest here would be self-evident.

Most of Barr’s holdings are in firms backed by Nyca Partners, a fintech-focused venture capital fund built by Wall Street and Silicon Valley veterans which Barr has advised for years. 

Over a decade after the financial crisis, few would still dispute that the revolving door between financial regulators and the financial industry helped pave the way for economic disaster. In the years preceding the crash, regulators who came from the country’s largest banks and planned to promptly return to them, removed regulatory restraints and turned a blind eye to the predictably dangerous effects (see, e.g. Robert Rubin and Alan Greenspan). In the next administration, different regulators drawn from the same well let the fraudsters off the hook and left the working people who had fallen victim to them out to dry.  

“Michael Barr was too close to fintech and cryptocurrency schemers to be the Comptroller of the Currency, and he is still too close to them to be Vice Chair for Supervision.”