At a hearing aimed at gutting financial reforms, Sen. Elizabeth Warren says ‘hands-off regulatory approach’ led to 2008 financial crisis
By Deirdre Fulton, staff writer for Common Dreams. Published 4-6-2016
“My question is, given your track record at the Fed, why should anyone take you seriously now?” Sen. Elizabeth Warren asked former Federal Reserve official Leonard Chanin on Tuesday. (Photo: Screenshot)
At a Senate Banking Committee hearing on Tuesday—which was described as “little more than another attempt to rail against Wall Street regulation”—U.S. Sen. Elizabeth Warren spent seven minutes tearing into former Federal Reserve deputy director Leonard Chanin, a man she said “might have one of the worst track records in history on this issue.”
The hearing, Warren said on her Facebook page, was called by Republicans “to talk about why we should roll back the rules on mortgages and credit cards because they’re just too costly for the banks.”
Chanin, who now works for a private law firm advising big banks, was summoned as a key witness by the GOP. But Warren called into question his credentials on the matter.
Citing the Financial Crisis Inquiry Commission, a bipartisan group charged with determining what caused the 2008 economic meltdown, the Democrat from Massachusetts lambasted the Federal Reserve’s “pivotal failure to stem the flow of toxic mortgages” as the “prime example” of “the kind of hands-off regulatory approach” that allowed the crisis to occur.
“So when you talk now about how certain regulations are too costly or too difficult to comply with,” Warren said, “you sound a lot like you did before the 2008 crisis when you failed to act. So my question is, given your track record at the Fed, why should anyone take you seriously now?”
Chanin, in turn, said: “There was simply no data presented to the Fed on a statistical basis that suggested that there was a meltdown in the mortgage market in 2005 or 2006.”
A clearly exasperated Warren interrupted him.
“I’m sorry, are you saying there were no data in the lead up the financial crash that showed the increasing default rates on subprime mortgages and what they were doing to communities across America?” she said. “Did you have your eyes stitched closed?”
“No hard data…” Chanin started to respond.
“Oh my god,” Warren sighed.
Watch the full, heated exchange below:
