"Face the Nation" on March 19, 2023

Interview

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Good morning.

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So I think that, right now, what we're trying to do is figure out the different ways to shore up these banks.

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Look, right -- right now, the one who's saving all of these banks is the federal government.

And the federal government is doing it through various...

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I...

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I understand that.

The point is, right now, the Treasury Department, the Fed, all of the government regulators, the FDIC, are trying to fire on all cylinders to try to figure out what they can do to prop up these banks. And the point I was trying to make is, the reason they're doing this is because this whole tranche of banks has been underregulated for five years now.

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And people are very concerned about, when you lift the hood, what's under the hood, since the regulators clearly have not been on top of their job.

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It's the reason that I'm calling right now for changes in the Fed in its regulatory approach, and changes in Congress, so that we roll back the authorization to lighten those regulations and that we put some accountability on these bank CEOs.

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Right. Well, I wouldn't call it a tweak.

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Yes. Right.

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I think that lifting the FDIC insurance cap is a good move.

Now, the question is, where's the right number on lifting it?

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But recognize that we have to do this because these banks are underregulated.

And if we lift the cap, we are requiring -- or relying even more heavily on the regulators to do their jobs.

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Because it means that the government is backing them up.

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This is a question we have got to work through.

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Is -- is it $2 million? Is it $5 million? Is it $10 million?

Small businesses need to be able to count on getting their money to make payroll...

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... to pay the utility bills. Nonprofits need to be able to do that.

These are not folks who can investigate the safety and soundness of their individual banks. That's the job the regulators are supposed to do.

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I -- I don't want to talk about private conversations, but I will say it is one of the options that's got to be on the table right now.

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Yes.

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Mm-hmm.

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Yes.

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No, I do not.

The Fed should have acted, both the San Francisco Fed and the Federal Reserve Bank. Remember, the Federal Reserve Bank and Jerome Powell are ultimately responsible for the oversight and supervision of these banks. And they have made clear that they think their job is to lighten regulations on these banks. We've now seen the consequence of this.

Look, it was...

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So, look, I -- this is the point I have been trying to make all along.

Jerome Powell has said that all he wants to do is lighten regulations on the banks. I opposed him as chairman of the Federal Reserve Bank precisely for that reason.

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I said he was a dangerous man to have in this position.

So, what we need to do right now...

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I appointed him -- that's exactly right.

I opposed him both times.

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That's exactly right, and for exactly this reason, because what he has done all along is lightened regulations on the banks.

And so what we need to do...

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Well, what I'm doing is being honest about what's gone wrong.

I don't think you build any trust at all if you don't start with why it's broken and who it is -- excuse me -- that is responsible for that. We need accountability for our regulators, who clearly fell down on the job, and that starts with Jerome Powell. And we need accountability for the executives of these large financial institutions.

Look, there should be clawbacks for Gary (sic) Becker and the others who explode these banks. So you take back the bonuses and big salaries.

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We should -- it certainly should. On both sides, there should be support for this.

And we should also borrow them from ever being...

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... in banking again.

We do that with stockbrokers. We should do the same thing with bankers.

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Thank you.

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