WASHINGTON – President Biden plans to appoint Graham Steele as assistant secretary of the treasury for financial institutions, a move that would put a longtime congressman with ties to progressives at the center of efforts to refocus financial rules on issues such as climate change and racial equity.
Mr Steele, a former Democratic counsel on the Senate Banking Committee and assistant to Sen. Sherrod Brown (D., Ohio), would oversee the Biden administration’s plans to tighten regulations on Wall Street businesses. This could include a close look at cryptocurrencies; open-end mutual funds and hedge funds and their roles in the market turmoil of the past year; and the financial sector’s exposure to climate change risks.
Mr. Steele is the director of the Corporations and Society Initiative at the Stanford Graduate School of Business, which seeks to “promote more responsible capitalism and governance,” according to his website. He was previously a staff member of the Federal Reserve Bank of San Francisco and also worked for Public Citizen, a progressive watchdog group, before joining Mr. Brown’s staff in 2010.
In recent years, he has been a strong advocate for treating climate change as a systemic risk to the financial system and called on US regulators to do more to deal with potential dangers, such as more frequent wildfires or droughts. that threaten the physical assets of banks. .
In a February 2020 article, he argued that the Dodd-Frank Act of 2010 gave regulators broad power to use macroprudential regulation to address climate-related risks, including through the Financial Stability Supervisory Board and the Reserve federal. For example, the Fed could use its authority to limit investments in fossil fuels based on their potential risks to financial stability, he said.
“By ignoring their responsibility to preserve financial stability, regulators allow financial institutions to continue directing massive amounts of capital to drivers of climate change like fossil fuel and deforestation companies, further fueling a carbon bubble. “, did he declare. “This worsens the financial climate risk, and with it the fragility of the financial system. “
In a separate paper last July, Steele called for changes to bank capital requirements that reflect the climate risks of certain assets, and said policymakers should encourage investments from banks that help make communities more resilient to climate change.
He criticized the Fed’s decision last year to buy bonds issued by oil and gas companies as part of its broader efforts to stabilize financial markets at the start of the Covid-19 pandemic. And he called the central bank to directly finance clean energy via green bond purchases.
Mr. Steele also warned of the risks associated with the disproportionate growth of the mutual fund industry and described ways in which policymakers could dampen asset managers, including through new limits on their size and their focus, as well as limits on the stakes they can build up in other industries.
If confirmed by the Senate, Steele will join a team of economic advisers in the Biden administration who have close relationships with progressive lawmakers, including Bharat Ramamurti, a former economic adviser to Senator Elizabeth Warren (D., Mass.) Who is the deputy director of the National Economic Council.
Write to Kate Davidson at [email protected] and Andrew Restuccia at [email protected]
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