'Dereliction of responsibilities': Elizabeth Warren calls out Janet Yellen for going easy on megabank mergers

28 June 2023

Although many far-right pundits have attacked Sen. Elizabeth Warren (D-Massachusetts) as a "socialist," the liberal/progressive senator doesn't view herself that way at all. Warren has described herself as a "capitalist to my bones," often stressing that maintaining competition is essential to capitalism's wellbeing.

Warren has repeatedly attacked monopolies as anti-free market and called for megabanks to be broken up into a bunch of smaller banks and forced to compete with one another. Sounding a lot like President Franklin Delano Roosevelt at times, Warren has maintained that she isn't out to hurt Wall Street — her mission is to save Wall Street from its worst impulses.

In a strongly worded letter sent to Treasury Secretary Janet Yellen, Acting Current Comptroller Michael Hsu, Assistant U.S. Attorney General Jonathan Kanter and others on Tuesday, June 27, Warren reiterated her disdain for megabank mergers and expressed concerns that the officials are being too merger-friendly.

The 74-year-old senator wrote, "Allowing additional bank consolidation would be a dereliction of your responsibilities, hurting American consumers and small businesses, betraying President Biden's commitment to promoting competition in the economy, and threatening the stability of the financial system and the economy."

Reporting for Politico on June 27, journalist Zachary Warmbrodt observed that "Warren's rebuke" showed a "major new rift with top Biden Administration officials over economic policy, in what will likely be just the beginning of a push by her to curtail mergers involving large banks." Warren, Warmbrodt notes, "said Yellen and Hsu appear to be taking 'the wrong lessons' from the failures of (Silicon Valley Bank), Signature Bank and First Republic."

The Massachusetts senator wrote, "I urge you to accelerate your work to update the bank merger review guidelines to put an end to regulators' practice of rubber stamping merger applications and strengthen the standards under which mergers are considered."

When Silicon Valley Bank collapsed in March, Warren warned that the SVB debacle underscored the need for "stringent" banking oversight.

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