Market Data 
By Pete Schroeder and Michelle Price
WASHINGTON (Reuters) -Christy Goldsmith Romero was pressed Thursday on whether she has the experience to overhaul the scandal-hit Federal Deposit Insurance Corporation (FDIC) and oversee the nation’s banks when she appeared before the Senate.
Beyond safeguarding deposits and supervising banks, the FDIC is a key player in rule-writing efforts that would impose new guardrails on banks and their executives, including contentious new capital hikes. Getting Goldsmith Romero confirmed before the November presidential election could cement Democratic leadership at the agency for years to come and ensure those rules are implemented.
A Democratic member of the Commodity Futures Trading Commission, Goldsmith Romero was nominated by President Joe Biden last month to replace Martin Gruenberg, who is stepping down as FDIC chair after a probe found widespread sexual harassment and other misconduct at the bank watchdog.
While praised by Democrats for her lengthy career in financial services, Republicans were quick to highlight her light experience on bank supervision specifically.
Senator Tim Scott, the top Republican on the Senate Banking Committee, said he worried she lacked the expertise to lead the agency and also fix its employee mistreatment issues.
“The next chair needs to be prepared to lead,” he said. “Correcting the culture at the FDIC is so important, and makes it challenging to have on the job training.”
In prepared testimony, she promised a “complete overhaul” of the agency’s culture, adding she would bring “accountability” to the watchdog.
Senators are expected to question Goldsmith Romero on how she will fix the FDIC’s cultural issues, handle the “Basel” capital hikes and rules on bank debt and banker pay, and whether she has sufficient bank supervisory expertise, analysts said.
“Commissioner Goldsmith Romero has little experience in banking regulation, so the hearing will be the first opportunity for industry stakeholders, including bank investors, to hear her views on regulation,” Brian Gardner, Stifel Chief Washington Policy Strategist, wrote in a note this week.
Investors and regulators continue have concerns about the health of the country’s regional banks which have been squeezed by high interest rates that contributed to three bank failures last year. She may be asked about the agency’s handling of that crisis, as well as recent troubles at fintech companies which partnered with FDIC-regulated banks.
An attorney with a background in enforcement who previously oversaw a 2008 crisis bank bailout program, Goldsmith Romero is backed by Democratic progressives but is generally seen as a non-contentious pick and has influential supporters in Republican circles, Reuters reported. She was unanimously confirmed by the Senate twice before.
“Goldsmith Romero’s no-nonsense, nonpartisan, inclusive, rigorous, and data-driven leadership style that holds people accountable is also exactly what the FDIC needs,” Dennis Kelleher, CEO of Better Markets, a Washington group that advocates for stricter regulations, said in a statement.
Sherrod Brown, the Democratic chair of the Banking Committee, praised her in his opening remarks, saying her record shows she can hold people and banks accountable.
Nominees need 51 votes to be confirmed in the evenly divided Senate where Democratic Vice President Kamala Harris can break a tie. But with contentious issues on the table and hardline Republicans vowing to oppose Biden nominees to protest former President Donald Trump’s conviction in May, some analysts expect the process could drag on.
“The question is whether the Republicans try to peel off a couple of Democrats against her,” Ian Katz, a managing directorat Capital Alpha Partners wrote in an email to Reuters.
“They won’t vote for her, but that’s not the same as going all out to stop her.”
Notably, Goldsmith Romero was introduced with heavy praise by Senator Mark Warner, a moderate Democrat from Virginia.
Kristin Johnson, another Democratic CFTC Commissioner, and Caroline Crenshaw, a Democratic member of the Securities and Exchange Commission, will also testify at the Thursday hearing.
Biden nominated Johnson to be the Treasury Department’s assistant secretary for financial institutions, and renominated Crenshaw to her role as SEC commissioner.
Johnson declined to comment, while Crenshaw’s office did not immediately respond to a request for comment.
