Elizabeth Warren just revealed her next big fight
It's not unusual for Janet Yellen's regular monetary policy reports to focus on issues that have nothing to do with monetary policy. And going into her Tuesday appearance before the Senate Banking Committee, it seemed like the conservative "audit the Fed" movement would be a key subject of the hearing. But the harshest questioning was related to something else entirely — and came from Elizabeth Warren.
The senator unexpectedly took aim at Scott Alvarez, the Fed's general counsel — a powerful job that he's held since 2004, when Alan Greenspan was chair. Alvarez has criticized Dodd-Frank rules in the past, and his comments often seem to agree with Greenspan's famously pro-deregulation views. Warren is both one of Congress's strongest bank regulation advocates and one of its most clever political entrepreneurs — and it seems she's found her next big cause.
What exactly is Elizabeth Warren upset about?
Warren offered three major lines of attack on Alvarez, focused mostly on the idea that he is too weak on bank regulation.
Swaps pushout: Warren asked Yellen about Alvarez's criticism of the swaps pushout rule that was repealed in Congress' December government funding bill (also known as the "cromnibus"
over Warren's strong objections. Alvarez had previously said of that rule, "You can tell that was written at 2:30 in the morning," as reported by Bloomberg News. "That needs to be, I think, revisited, just to make sense of it."
Rating agencies: Warren also took aim at Alvarez's views on restricting credit rating agencies, the ones that gave inflated ratings to bad mortgage-backed securities in the run-up to the financial crisis. Alvarez at one point said he thought Dodd-Frank's restrictions were "more constraining than I think is helpful," as The Week reported. Opponents, meanwhile, have said the rules weren't nearly tight enough.
Fed leaks: Warren pressed Yellen on a leak from the September 2012 Fed meeting, in which the Fed's monetary policy committee decided to undertake its QE3 program. Before the minutes came out, as ProPublica writes, an economic consulting firm, Medley Global Advisers, sent out a note saying the minutes would show disagreement among the committee members about QE3. The note also had "uncommon detail" about how the minutes were put together, as ProPublica writes. The minutes did betray disagreement, and Bernanke also afterward expressed worries about a leak. Alvarez was in charge of investigating the leak, but the results aren't public yet, and Warren expressed frustration at her difficulty in getting a briefing from Alvarez about the status of the investigation.
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http://www.vox.com/2015/2/24/8103581/elizabeth-warren-yellen-dodd-frank
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Wish there were more like her and Bernie.
