The news: After the Wall Street Journal reported on the toxic work environment at the Federal Deposit Insurance Corporation (FDIC), and claimed that Chairman Martin Gruenberg allegedly did little to abate it, he faces growing calls to resign.
How we got here: The FDIC has proposed a series of new rules that financial institutions (FIs) say would cost them billions of dollars, prompting strong lobbying efforts in opposition.
That’s not the only change coming from the FDIC, though. Recently, the agency:
Combined, these bills marked a regulator-led change in perception about big banks’ responsibilities for climate change and the financial well-being of American consumers.
What happened at the FDIC? Last week, the Wall Street Journal published findings from an investigation it undertook into the agency’s toxic work environment, based on interviews with more than 100 current and former FDIC employees.
Why does it matter for FIs? This investigation and Gruenberg’s uncertain tenure have broader implications for US FIs. His resignation could potentially stymie the agency’s agenda with a two-two partisan split board, half of which opposes the stricter capital requirements.
Next steps: The fallout from the investigation not only undermines the agency's credibility but also casts doubt on its ability to spearhead effective and fair regulatory initiatives.
We’ll be watching closely for any decisions about Gruenberg’s tenure.
One Liberty Plaza9th FloorNew York, NY 100061-800-405-0844