Biden Fed nominee says regulators should push to 'allocate capital' away from fossil fuels

GOP Sen. Toomey says Sarah Bloom Raskin may 'abuse the Fed's narrow statuatory mandates'

President Biden's nominee to be the vice chair for supervision at the Federal Reserve is emerging as a fresh target for Senate Banking Committee Republicans after they blocked Saule Omarova's nomination to be the comptroller of the currency last year. 

The president nominated Sarah Bloom Raskin, a former deputy secretary of the Treasury and former governor of the Federal Reserve Board, for the vice chair for supervision job last week. Raskin is a professor at the Duke University School of Law. 

Biden said she is "among the most qualified nominees ever for the position of vice chair for supervision," and the White House touted her experience "pursuing innovative solutions to enhance … the resilience of our country’s critical financial infrastructure, particularly as it related to climate risk."

But Senate Banking Committee Ranking Member Pat Toomey, R-Pa., said Friday that Raskin's past work and statements on climate issues raise concerns she might try to go beyond the mandate of her role at the Fed. 

Sarah Bloom Raskin

Sarah Bloom Raskin, former governor of the U.S. Federal Reserve, listens during an open meeting of the Board of Governors of the Federal Reserve in Washington, D.C., Dec. 10, 2013.  (Andrew Harrer/Bloomberg via Getty Images / Getty Images)


"Sarah Bloom Raskin has specifically called for the Fed to pressure banks to choke off credit to traditional energy companies and to exclude those employers from any Fed emergency lending facilities," Toomey said. 

"I have serious concerns that she would abuse the Fed's narrow statutory mandates on monetary policy and banking supervision to have the central bank actively engaged in capital allocation."

Raskin has commented on how financial regulators should approach fossil fuels in several different publications in recent years. 

Pat Toomey

Ranking member Pat Toomey, R-Pa., questions Saule Omarova, a nominee to be the comptroller of the currency, as she testifies before the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill in Washington, Nov. 18, 2021.  (Jim Watson/AFP via Getty Images / Getty Images)


"Despite these growing costs [of climate change], U.S. financial regulators have yet to show that they are thinking creatively about potential solutions," Raskin said in a September article on Project Syndicate.

"All U.S. regulators can – and should – be looking at their existing powers and considering how they might be brought to bear on efforts to mitigate climate risk," she added on Project Syndicate. "They need to ask themselves how their existing instruments can be used to incentivize a rapid, orderly and just transition away from high-emission and biodiversity-destroying investments."

Raskin added that regulators should also ask how "regulatory changes relating to disclosure, access to credit and pricing of risk support a rapid and just green transition."

That September article is far from Raskin's only writing on using financial regulators to move away from fossil fuels. 

In May 2020, she said the U.S. response to the COVID-19 pandemic should have excluded fossil fuel companies because that industry, she said, is "dying." In Jan. 2021, Raskin wrote in the Financial Times that U.S. financial regulators should "reimagine capital as a tool for accelerating and smoothing the transition to a world of net-zero carbon emissions." 


She wrote in the Financial Times that regulators should "guide the market's need for a reassessment of asset values" on polluting industries. 

Sherrod Brown, D-Ohio

Chairman Sherrod Brown, D-Ohio, questions Saule Omarova, a nominee to be the comptroller of the currency, as she testifies before the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill in Washington, D.C., Nov. 18, 2021.  (Jim Watson/AFP via Getty Images / Getty Images)

A White House official told Fox News that Raskin's main job would be mitigating risks for the financial sector and, more broadly, the U.S. economy. That includes cybersecurity and climate risks, the official said, noting that Federal Reserve Chairman Jerome Powell said the Fed is already considering potential climate-related stress tests. 

The official also said that Raskin, as a former Fed official, will keep in mind the institution's independence and its limited mandate. 

House Financial Services Committee Ranking Member Patrick McHenry, R-N.C., did not explicitly support Raskin's nomination but notably did not attack her as harshly as Toomey. 

"Former Fed Governor Raskin has a long history of distinguished government service," McHenry said. "I encourage her to maintain the apolitical posture of previous vice chairs for supervision and to focus on the supervisory role while leaving social and fiscal policymaking to Congress."

Bloomberg reported that Senate Banking Committee Chairman Sherrod Brown, D-Ohio, is expected to enthusiastically back Raskin and plans to hold a hearing with Raskin and two other Fed nominees in early February. 

"Governor Raskin is a former state banking regulator who was unanimously confirmed by the Senate twice," Brown's office said in a statement to Fox News. "She understands that the Fed’s role is to manage lending risks, not to prevent them from lending to businesses. The criticism of her is completely off base and just factually inaccurate."


Sen. Elizabeth Warren, D-Mass., also a member of the Banking Committee, said in a statement last week that Raskin "is a tough and thoughtful financial regulator with decades of experience at both the state and federal levels" who "brings a commitment to protect the American people that has been sorely missing from the Fed Board for years." 

A senior Republican aide, meanwhile, told Fox News that Republicans think they'll be able to get at least one Democrat to oppose Raskin, which would tank her nomination as long as Republicans remain united against her. 

"I would be surprised if Joe Manchin was able to get behind a Fed nominee who has urged the central bank to exclude fossil fuel companies from its lending facilities during a crisis," the aide said.