FDIC chair Martin Gruenberg to quit following workplace harassment probe

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Martin Gruenberg has announced he will step down as chair of the Federal Deposit Insurance Corporation after an investigation found a “misogynistic” workplace culture at the US banking regulator and raised questions about his leadership.

“In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed,” Gruenberg, who has been with the bank regulator since 2005, said in a statement on Monday.

“Until that time, I will continue to fulfil my responsibilities as chairman of the FDIC, including the transformation of the FDIC’s workplace culture,” he added. “I have faithfully carried out the critically important mission of the FDIC to maintain public confidence and stability in the banking system”.

Gruenberg’s departure comes as US bank regulators move to implement reforms — known as Basel III — that would compel banks to increase their capital requirements. The reforms are widely opposed on Wall Street and by Republicans and some Democrats in Washington. 

Sam Michel, White House deputy press secretary, said on Monday that President Joe Biden would “soon put forward a new nominee for FDIC chair” and “expect[ed] the Senate to confirm the nominee quickly”.

Naming Gruenberg’s successor while Democrats control the Senate, ahead of the 2024 general election in November, gives Biden more power over the next appointment — helping the push to implement Basel III.

Gruenberg’s presence at the FDIC until a successor is confirmed also means Democrats will retain a 3-2 majority on the agency’s board of directors.

Gruenberg “has helped protect the economy from financial instability and worked to ensure the banking system serves more Americans fairly”, Michel said, while noting “his commitment to swiftly implement the recommendations made in the recent report”. 

Gruenberg’s announcement came just hours after Sherrod Brown, the Democratic chair of the powerful Senate banking committee, urged the White House to replace him following “further outreach from FDIC employees”. The White House did not respond to a request for comment on Brown’s statement. 

The FDIC had commissioned the independent report, which was produced by law firm Cleary Gottlieb and released earlier this month, in response to press accounts of harassment and discrimination against female employees.

The findings described the watchdog as a “good ol’ boys club where favouritism is common, wagons are circled around managers, and senior executives with well-known reputations for pursuing romantic relations with subordinates enjoy long careers without any apparent consequence”.

The report alleged that FDIC staff had seen Gruenberg, who has headed the agency for 10 of the past 13 years, “lose his temper and express anger in ways that they felt were offensive and inappropriate”.

Gruenberg had apologised to staff in an internal memo in response to the report, which he described as “sobering”.

Additional reporting by Stephen Gandel

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