Federal Deposit Insurance Corporation Chairman Martin Gruenberg said in the wake of a scathing 234-page report released Tuesday that reveals widespread sexual harassment and other misconduct plaguing federal banking regulators. Calls for his resignation are pouring in.
The damning report, released in November by the law firm Cleary Gottlieb Steen & Hamilton and inspired by a Wall Street Journal investigation, found that Gruenberg was responsible for the FDIC’s toxic workplace. It is not accepted that it exists alone.
However, “we recognize, as many FDIC officials have said of Chairman Gruenberg, that culture ‘starts at the top,'” the report said.
Cleary Gottlieb also said that Gruenberg, who has served as FDIC chair since 2023 but has led the agency since joining the board in 2005, “has been given particularly bad news. He recorded several instances in which he violently attacked his subordinates “when he was approached with a view that differed from his own.” ”
CNN earlier reported that the incident has created an atmosphere of fear at the company, with staffers preparing to share potentially upsetting news with Gruenberg.
The report added that Gruenberg’s temperament “may hinder his ability to establish trust and confidence in leading meaningful cultural change.”
Calls for Gruenberg, a Democrat appointed by President Joe Biden, to resign are led by Republicans.
According to CNN, only on the left, Rep. Bill Foster (D-Ill.) is calling for Gruenberg to step down.
If Mr. Gruenberg relents and actually resigns, it could have a significant impact on banks across the country, CNN reported.
Dennis Kelleher, president and CEO of Better Markets, a group that advocates for the policy, said the move is a sign that the Federal Reserve is in a position to pass all kinds of regulations that tighten capital requirements for banks. It would defeat the FDIC’s initiative to work with the system and the Office of the Comptroller of the Currency. For financial sector supervision.
Kelleher also told CNN that without Gruenberg at the helm, rulemaking would “come to a screeching halt.”
An FDIC spokesperson told the outlet that Gruenberg has “already implemented the report’s recommendations,” adding that “at his direction” the agency has “noted a change monitor and an independent third party.” We are working on identifying and appointing experts.” Please support these efforts. ”
The FDIC did not immediately respond to the Post’s request for comment.
Late last year, three agencies, the FDIC, the Federal Reserve, and the Office of the Comptroller of the Currency, approved preliminary steps to finalize the Basel III endgame. Basel III Endgame is a set of rules that requires the largest U.S. banks to set aside more capital and limit the amount of capital they hold. Funds that must be lent to customers.
According to CNN, after Republicans on the FDIC board voted against the Basel III endgame, the organizations are evaluating the original proposal and are poised to propose new rules based on comments received. It is said that
TD Cowen policy analyst Jarrett Seiberg said in a Tuesday memo obtained by CNN that this is why “Mr. Gruenberg’s departure is a positive for the big banks.”
However, Cyburg noted that no major Democratic Party member, such as Sen. Elizabeth Warren, has called for his resignation, and that White House press secretary Karine Jean-Pierre has no doubts about Biden’s policies. said he did not expect Mr. Gruenberg to resign. Ability to lead the FDIC.
This is likely because if Gruenberg were to resign, Republican-appointed Vice Speaker Travis Hill would automatically become chairman until a successor is appointed by the president and confirmed by the Senate, CNN reported. .
Mr. Hill voted against Basel III Endgame.
