Sen. Elizabeth Warren asked Treasury Secretary Steven Mnuchin for more information Friday about what prompted his extraordinary calls to bank executives and regulators during a stock market tumble in December.
The Treasury secretary called the CEOs of the six largest U.S. banks to check on their liquidity on Dec. 23, after the worst week for the Dow Jones industrial average since the financial crisis in 2008. A day later on Christmas Eve — when the S&P 500 fell nearly 3 percent in part due to concerns about Mnuchin's talks with bank executives — the Treasury secretary also spoke to top U.S. regulators about maintaining normal market operations.
An administration would normally only take those steps when faced with the real possibility of an economic downturn or stock market collapse. In a letter to Mnuchin dated Monday, Warren questioned why the secretary carried out those calls when market participants had not raised major concerns about stability or financial institution liquidity.
"The public announcement of these calls was a rare step for a Treasury Secretary to take. Moreover, your calls sought to assuage a concern — the liquidity of banks — that neither banking regulators nor executives had publicly indicated was a problem," the Massachusetts Democrat and Wall Street watchdog wrote.