Climate groups have reacted with dismay after opposition from fossil fuel interests sank a key nomination to the Federal Reserve board.
Sarah Bloom Raskin, President Biden’s nominee for supervision vice chair, had come under attack from Republicans and oil and gas lobbyists, who sought to portray her as wanting to penalise lending to polluting companies. Raskin has been vocal about the need for regulators to address the financial risks arising from climate change.
Last month, Republicans on the Senate banking committee declined to participate in a vote on her confirmation. The White House and Senate Democrats had been working to find a way forward, but any remaining hopes were dashed when Democratic senator Joe Manchin said he would oppose Raskin’s nomination if it progressed to a vote of the full Senate. With no sign of any Republican support, such a vote looked certain to be lost.
David Arkush, managing director of Public Citizen’s Climate Program said, “At the behest of the oil and gas industry, Senate Republicans and Senator Manchin smeared and killed the nomination of the most qualified person in the country to lead the US through our present economic and financial stability challenges as vice-chair for supervision, because she had the temerity to voice aloud simple realities around climate change that most regulators agree with.”
Speaking about Raskin’s nomination last week, Manchin expressed his belief in the importance of financing all forms of energy, including fossil fuels. Climate advocates have pointed out that Manchin is the Senate’s top recipient of donations from coal, oil and gas companies, many of which have publicly opposed Raskin’s nomination.
Ben Cushing, campaign manager at the Sierra Club, stressed in a tweet that it was not the big banks that opposed regulators taking action on climate risk, but rather “the fossil fuel companies that don’t want banks and regulators to internalize how risky they are.” The American Bankers Association had previously congratulated Raskin on her nomination.
Measures proposed by Raskin – such as integrating climate risks into supervisory expectations, developing climate scenario analyses, and enhancing climate disclosure rules – have been supported by all top US regulators, along with many of their counterparts across the world.
Raskin stressed this point in her letter to President Biden withdrawing her nomination. “Any vice-chair for supervision who ignored these realities – which are manifesting every day across this country – would be guilty of gross dereliction of duty,” she said.
In a statement following Raskin’s announcement, President Biden urged the Senate banking committee to move swiftly to confirm the four remaining nominees for the Fed board – Jerome Powell, Lael Brainard, Philip Jefferson, and Lisa Cook. Pat Toomey, the top Republican on the Senate Banking Committee, said yesterday that he and his colleagues are now ready to participate in a vote on the other nominees.
Speculation has already begun about who Biden might nominate in Raskin’s place. Among the names that have been mentioned are Treasury undersecretary Nellie Liang and Atlanta Fed president Raphael Bostic.
Speaking at a conference organised by the Institute of International Bankers earlier this month, Laing warned there would be significant costs if financial regulators were too slow to act on climate risks, and said US authorities were working with their counterparts in other countries to establish supervisory principles.
This page was last updated March 18, 2022
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