The head of the US Federal Deposit Insurance Corporation Martin Gruenberg faced outraged criticism from lawmakers on Tuesday following a media report that cited pervasive allegations of sexual harassment at his agency.
Gruenberg , who appeared at a Capitol Hill oversight hearing with other top financial regulators, told the Senate Banking Committee he was personally distraught after the Wall Street Journal’s report on Monday and committed to providing a safe working environment for staff. FDIC Chairman said the agency had no tolerance for the alleged misconduct in its workplace, which was detailed in a article on Monday. The newspaper’s investigation found that female examiners left the FDIC after facing what the article described as a “sexualised, boys’ club environment,” and because they said they were given fewer opportunities than male colleagues. “I am personally disturbed and deeply troubled by this report,” Gruenberg told the Senate Banking Committee. “The FDIC is conducting a comprehensive review, including engaging an independent third party, to ensure that we understand the nature of these issues and take all appropriate actions to address them.”
Gruenberg said the review would look into conduct across the agency and he hoped the study would be completed within 90 days. He added that agency management must make employees confident that they are safe to raise complaints and that officials will keep those complaints confidential.
Earlier on Tuesday, key House Republican lawmakers demanded that the FDIC inspector general “expeditiously provide a briefing on the FDIC’s workplace culture.” They asked for a briefing later this month.
The work of bank examiners has been under scrutiny this year since multiple midsize lenders collapsed. In April, following the failure of Signature Bank, the FDIC said its examiners were too slow to respond to problems at the bank, partly due to a staffing shortage in its New York office. The FDIC said that “resource challenges” in that office kept it from adequately staffing an examination team dedicated to the lender. In addition to Gruenberg, Tuesday’s hearing features top banking watchdogs at the Federal Reserve and Office of the Comptroller of the Currency. They fielded a range of questions about how regulators were addressing issues raised by collapses of Signature and Silicon Valley Bank in March.
Michael Barr, the Fed’s vice chair for supervision, told lawmakers that his agency’s supervisors are conducting targeted reviews and working to keep tabs on new products being launched by lenders. He also defended regulators’ bid to demand that banks hold more capital.
The banking industry has launched an aggressive lobbying and public-relations campaign against that proposed capital rule. Regulators are currently in the process of taking comments from the public on the plan.
“If there are areas that we can improve the rule, we’re very open,” Barr said.
First Published: Nov 16 2023 | 11:17 PM IST