Biden picks top regulator under fire for floating ‘radical reshaping’ system to ‘end banking’


Saule Omarova has argued for an end to banking “as we know it” – and she is now vying to oversee the country’s banks.

Late last month, President Joe Biden announced plans to appoint Cornell University law professor Omarova as Comptroller of the Currency. His nomination is expected to generate fierce opposition from Republicans and could be overturned by a single centrist Democratic vote.

Omarova was born in Soviet-controlled Kazakhstan and attended Moscow State University through the Lenin Personal Academic Fellowship, where she graduated in 1989. In a recent article titled “The People’s Ledger: How to Democratize money and finance the economy ”, Omarova proposes a plan to“ ”radically reshape the basic architecture and dynamics of modern finance.

The article calls for sweeping changes in the way the US banking system works by giving the Federal Reserve near total control of the entire financial system. She suggests that the central bank’s balance sheet should be redesigned to function as “the ultimate public platform for both modulating and allocating the flow of sovereign credit and money in the national economy.”

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In the “exploratory exercise”, it essentially promotes the nationalization of the banking system by envisioning a system in which the Fed’s accounts do not compete with the deposits of private banks but “completely replace” them.

“Banks, in other words, will no longer be ‘special’,” Omarova wrote. “By separating their lending function from their monetary function, the proposed reform will effectively end banking as we know it. ”

Amid the COVID-19 pandemic, she also brought up the idea of ​​a national investment authority, a new government bureaucracy that would act directly in financial markets to allocate “public and private capital” to the fight against inequalities, climate change and other social ills.

Omarova’s remarks on Twitter about the USSR also generated waves following the announcement of her next appointment.

“Until I came to the United States, I couldn’t imagine that things like the gender pay gap still existed in the world today. Say what you want about the former USSR, there was no gender pay gap. The market does not always “know the best”, she said. wrote .

Responding to a Twitter user who rejected the idea, she regular with: “I never claimed that women and men were treated absolutely equally in all aspects of Soviet life. But people’s salaries were set (by the state) regardless of gender. And all the women received very generous maternity benefits. Both things are still a pipe dream in our society!

His appointment faces an uphill battle in the Senate given his academic reflections. A senior Republican Senate official told the Washington Examiner Friday it will be very difficult for pro-business Democratic senators such as Mark Warner of Virginia, Kyrsten Sinema of Arizona, Joe Manchin of West Virginia and Jon Tester of Montana to join Biden’s pick.

The Manchin, Tester and Sinema offices did not respond to inquiries from the Washington Examiner. Warner’s office declined to comment on the matter.

These lawmakers are already feeling pressure from interest groups, with the US Chamber of Commerce speaking out against Omarova. In a letter to the Banking Committee, House Executive Vice President Neil Bradley said his group, the world’s largest trading organization, “strongly opposed” his appointment.

“The House generally feels that Presidents deserve some deference to their candidates. This deference assumes that candidates are inclined to faithfully carry out the law, and not to pursue radical political agendas incompatible with the obligations of the post of trust to which they are appointed, ”he said.

In a statement provided to Washington ExaminerAmerican Bankers Association President Rob Nichols said that while the association recognizes the “historic nature” of Omarova’s appointment – she would be the first woman and minority to hold the post – its members are worry about some of his economic ideas.

“We have serious concerns about his ideas to fundamentally restructure the banking system of the country which remains the most diverse and competitive in the world,” Nichols said. “His proposals to effectively nationalize US community banks, end risk-based regulatory adaptation, and eliminate dual banking are particularly troubling.”

Likewise, Senator Pat Toomey, the top Republican on the banking committee, also criticized Omarova.

Ms. Omarova called for ‘radically reshaping the basic architecture and dynamics of modern finance,’ including nationalizing retail banking and asking the Federal Reserve to allocate credit, ‘the Republican said. Pennsylvania. “She also pleaded for” to effectively end[ing] the bank as we know it. In light of these and other far-left ideas, I have serious reservations about his appointment. ”

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His appointment comes after Republicans also expressed concern over the confirmation of Rohit Chopra, an ally of Democratic Senator Elizabeth Warren of Massachusetts, as head of the Consumer Financial Protection Bureau. It was confirmed in a party line vote Thursday, with no Republican having voted in favor.

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