Sen. Warren Says New York Fed Pick Should Testify Before Senate Ahead of Appointment

By Nick Timiraos and Michael S. Derby 

U.S. Sen. Elizabeth Warren (D., Mass.) said Monday that John Williams should testify before the Senate Banking Committee before being approved as the next president of the Federal Reserve Bank of New York.

The Wall Street Journal reported Saturday that Mr. Williams, who now serves as leader of the San Francisco Fed, was the front-runner to become the New York Fed chief, one of the top jobs in the central bank system.

The selection is subject to approval by the Washington-based Fed board of governors and doesn't require Senate confirmation. But Ms. Warren called on the Fed board to withhold its assent until Mr. Williams testifies before the banking committee, on which she sits.

She questioned Mr. Williams's "fitness" for the job at the New York Fed, which supervises some of the nation's biggest banks, given the recent sales practice scandals at Wells Fargo & Co., which is regulated by the San Francisco Fed, among other agencies. The Fed in early February placed restrictions on Wells Fargo for failing to have proper risk controls in place that could detect such issues. In an unusual move, it barred the bank from growing past the $1.95 trillion in assets it had at the end of 2017. The Fed cited "widespread consumer abuses" in its rebuke.

Mr. Williams's "track record raises several questions, including about his fitness to supervise Wall Street banks given the San Francisco Fed's inadequate supervision of Wells Fargo during its many consumer scandals, " Ms. Warren said in a statement.

"If Mr. Williams is selected, the Fed's Board of Governors should not approve his selection until Mr. Williams and the co-chairs of the New York Fed's search committee testify before the Senate Banking Committee about his qualifications and the process that led to his selection."

The Fed board didn't respond immediately to a request for comment. The New York and San Francisco Fed banks declined to comment.

The New York Fed's board of directors has recommended Mr. Williams for the job, according to people familiar with the matter. The search was run by directors who don't work for Fed-regulated banks.

The New York Fed president plays a key role in crafting and implementing the central bank's monetary policy and is its main point of contact with financial markets. This has caused some critics of the selection process to say it should be more open to public scrutiny and input, and the appointment should be subject to Senate confirmation.

Write to Nick Timiraos at [e-mail] and Michael S. Derby at [e-mail]

(END) Dow Jones Newswires

March 26, 2018 16:53 ET (20:53 GMT)

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