Powell, seeking reappointment, says big bank capital at ‘multidecades high;’ vows to earn trust

Ensuring a strong and resilient financial system, with increased capital and liquidity requirements for large banks, was among the accomplishments cited by the chair of the Federal Reserve in testifying for himself for another term at the helm of the agency.

In testimony Tuesday before the Senate Banking Committee, Federal Reserve Board Chair Jerome H. (“Jay”) Powell indicated that as a result of actions taken by the Fed Board under his leadership, “currently, capital and liquidity levels at our largest, most systemically important banks are at multidecade highs,” Powell told the committee members during the hearing on his renomination as Fed Board chair.

President Joe Biden (D) nominated Powell for a second, four-year term as Fed chair in November. Powell’s current term as chair ends in February; his term as a board governor ends in 2028.

Powell also suggested that the Fed Board, under his leadership, acted to expand its analysis and monitoring of financial stability. “We will remain vigilant about new and emerging threats,” he said. He also said the Fed, while he has been chair, intensified its focus and supervisory efforts on evolving threats such as climate change and cyberattacks, and improved public access to instant payments.

As for the independence of the Fed (something that was occasionally at question while Donald Trump [R] was president), Powell acknowledged that Congress has given the agency “considerable independence” in using its tools to achieve the Fed’s congressionally mandated goals of maximum employment, stable prices, and moderate long-term interest rates.

“In our democratic system, that independence comes with the responsibility of transparency and clear communication, to keep the public informed and enable effective legislative oversight,” Powell said. “That duty takes on even greater significance when the Fed must take extraordinary actions in times of crisis.”

He said he has made it a priority of his to earn the trust of the Congress and the American people by meeting regularly and frequently with members of Congress. “I commit to continuing that practice if I am confirmed to another term,” he said.

Federal Reserve Chair Jerome H. Powell, testimony before Senate Banking Committee on his renomination