US President Donald Trump's pick to replace Federal Reserve chair Janet Yellen today defended plans to lighten the regulatory load on the banking sector.
Jerome Powell told a Senate hearing on his nomination his plans did not constitute deregulation per se. Instead, he wanted review regulation that had been put in place since the financial crisis.
He said: "It is looking back and making sure what we did makes sense... It does not help anyone for banks to waste money."
As a member of the Fed board of governors, Powell said interest rates are due to continue rising gradually. "Conditions are supportive" of a 0.25 per cent rise when the rate-setting committee meets in December, he said.
Powell said the problem of "too big to fail" banks had been all but solved. He did not think there were any banks that were so large that they could lead to a contagion across the sector.
The 64-year-old former investment banker was broadly supportive of current Fed policy, although he did share concerns over the level of the response of the US central bank to the financial crisis.
Today’s testimony has put those fears to rest it seems, with ‘steady as she goes’ being the message to take away. Certainly, the US dollar seemed to take his testimony in good heart, putting in a second day of gains and reversing some of the losses suffered thus far in November.
Trump nominated Powell from a list of five finalists that also included Yellen.