Randal Quarles, President Donald Trump’s pick to be Wall Street’s top regulator, conceded that he should have been tougher on banks during a stint at the Treasury Department before the 2008 financial crisis.
That isn’t insulating him from attacks from Democratic lawmakers, who say his past inaction makes him a poor choice for his new role.
Facing withering criticism at a Senate confirmation hearing Thursday, Quarles said “with the benefit of hindsight, we could have been more aggressive.” Trump has nominated Quarles to be the Federal Reserve’s vice chairman of supervision, which would make him the U.S.’s most influential bank watchdog.
Senator Sherrod Brown, the Senate Banking Committee’s top Democrat, said Quarles seemed “asleep at the switch” when he worked at Treasury more than a decade ago for not doing more to respond to rising home foreclosures and other dangers that were building in the financial system.
Quarles told members of the banking panel that Treasury failed to act more quickly because of political headwinds, though he said he and others in George W. Bush’s administration had ideas at the time for improving Wall Street oversight. Still, Ohio’s Brown chided him for making optimistic comments just before the economy headed for a meltdown.
“The economy is strong, the financial sector is healthy, and our future looks bright,” Quarles said in a 2006 speech, two years before the near-collapse of the financial system that prompted Congress to rescue banks with a $700 billion taxpayer bailout.
Democrats’ criticism of Quarles was contrasted by Republicans. They praised his depth of experience, and that of another key nominee who testified at Thursday’s hearing: Joseph Otting, Trump’s choice to run the Office of the Comptroller of the Currency.