Warren op-ed: Don't surrender oversight of big banks

Warren op-ed: Don't surrender oversight of big banks
© Greg Nash

Sen. Elizabeth WarrenElizabeth Ann WarrenWarren: Trump is a 'racist bully' Poll: Oprah would outperform Warren, Harris against Trump in California Democrats continue to dismiss positive impacts of tax reform MORE (D-Mass.) wants to see big banks remain under strict scrutiny from the Federal Reserve, writing in a Thursday op-ed that loosening oversight could lead to another financial crisis.

The 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act directed the Fed to apply stricter oversight and regulation to banks with more than $50 billion in assets, something it has done a good job of implementing, Warren said. However, she warned Congress against loosening the stress-testing requirements for such institutions.

Lobbyists have urged Congress to replace the $50 billion threshold to $250 billion, or replace it with a multi-factor test, Warren said in the Bloomberg opinion piece.

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“Both approaches are dangerous to the economy because they substantially reduce oversight of the biggest and riskiest banks,” Warren wrote, saying the Fed had a responsibility to monitor big banks before the 2008 financial crisis and failed.

Warren, a favorite on the left for her financial policies, has often spoken out against large banks during her time as senator.

The motivation for changing the $50 billion threshold is tied to creating additional stock buybacks, mergers and executive bonuses, Warren argued. She added that weakening financial oversight in the past helped led to the Great Recession.

“We shouldn’t make that mistake again,” Warren said. “The $50 billion threshold is working and it shouldn’t be touched.”