An investigation by the law firm Cleary Gottlieb found an agency rife with sexual harassment, bullying and discrimination, where complaints were ignored and perpetrators went unpunished. The results have put pressure on Gruenberg, who has been a core member of the FDIC since 2005, in rotations as its president and board member. The report found that Gruenberg contributed to a culture of bullying and that his subordinates, fearful of being reprimanded, were reluctant to give him bad information.
This avalanche of information has led some critics to link Gruenberg’s temper to lapses by the Federal Deposit Insurance Corporation last spring, when three regional banks failed and the agency was slow to seize them, raising concerns about contagion that forced the government to guarantee deposits at two of the banks. . . Republican members of Congress and At least one Democrat They called on him to resign.
But Gruenberg, a progressive who has pushed for tougher rules on Wall Street throughout his career, is key to a financial regulation agenda that includes forcing banks to hold more capital, reining in bonuses and stepping up merger reviews. If he is forced out of office, the FDIC would be paralyzed, split evenly between Democratic and Republican board members, and run at least temporarily by Republican Travis Hill.
“There’s a lot of blame to go around,” said Dennis Kelleher, of the progressive think tank Better Markets. “This is outrageous, but attacking only Democrats, which will have the inevitable consequence of disrupting this important work, is clearly partisan politics.”
(In some good news for Warren, the Supreme Court this morning unacceptable A constitutional challenge that would have dismantled or destroyed the CFPB. Warren first Proposal She conceived the idea for a consumer-focused financial regulator in 2007 when she was a professor at Harvard University, and was appointed by former President Barack Obama to create the agency after the global financial crisis.
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