Sarah Bloom Raskin, President Joe Biden’s pick for a top Federal Reserve role, pushed back on accusations that she would seek to have the Fed combat climate change.
Raskin, testifying before the Senate Banking Committee on Thursday, appeared prepared to address Republicans’ concerns that she supports reallocation of capital away from companies that contribute to climate change. If confirmed as vice chairwoman for supervision, she would have one of the most powerful roles within the central bank.
“It is inappropriate for the Fed to make credit decisions and allocations,” Raskin told lawmakers. “Banks choose their borrowers, not the Fed. It’s inappropriate for the Fed to choose winners and losers, doing so is not the proper institutional role of the Fed. That’s a cardinal principle of Fed supervision.”
BIDEN FED NOMINEE RASKIN FACES GOP OPPOSITION OVER CLIMATE CHANGE ACTIVISM
Raskin’s past writing indicates that she thinks the Fed should seek to limit climate change. In an article published last September, she suggested financial regulators must “reimagine their own role so that they can play their part in the broader reimagining of the economy.”
“Climate change threatens financial stability; addressing it can create economic opportunity and more jobs,” she wrote in a New York Times op-ed in 2020. “The decisions the Fed makes on our behalf should build toward a stronger economy with more jobs in innovative industries — not prop up and enrich dying ones.”
During the Thursday hearing, Sen. Pat Toomey, the ranking member of the committee, pushed back on Raskin’s suggestion that she doesn’t think the Fed should pick winners and losers and said that from “repeated speeches, op-eds, podcasts,” it “seems clear” that she sees climate change as an existential threat and that it is necessary and appropriate for financial regulators to allocate capital away from companies that are worsening climate change.
“The way supervision works is by looking at risk and by looking at risk wherever it may arise. You look at that risk, and you have to do it in a very honest way, and ask yourself whether there is any correlation between that risk and the ability to hurt a financial institution,” she responded before Toomey cut in and asked if she no longer holds her views on capital allocation.
“My views have been consistent, senator. The Fed should not pick winners and losers,” she said.
Toomey said there is “no reasonable reading” of Raskin’s past stances that can lead to a conclusion other than she wants to reallocate capital from companies that pump out carbon dioxide into the atmosphere.
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Two other Biden nominees for the Fed board, Lisa Cook and Philip Jefferson, are also facing questions from lawmakers on Thursday.
