U.S. Senator Elizabeth Warren has called for a former Trump-appointed banking regulator to be dismissed from the global financial watchdog, warning he is putting the world’s economic stability at risk.

Randal Quarles, who was vice chair of supervision at the U.S. Federal Reserve from 2017 to 2021 where he oversaw a wave of deregulation, was last month chosen to lead a worldwide review of post-2008 financial crisis reforms for the Financial Stability Board.

In a letter addressed to FSB Chair Andrew Bailey, obtained by POLITICO, Warren blamed Quarles’ deregulatory measures for the collapse of three U.S. banks including Silicon Valley Bank in 2023 and warned he would bring the same mindset to global standards.

“Mr. Quarles spent his tenure as a top financial regulator in the United States weakening safeguards for megabanks at the expense of financial stability and the American public,” said Warren, a former U.S. presidential hopeful who is the most senior Democrat on the Senate banking committee.

“It would be deeply troubling if this FSB review became a mechanism to coordinate the easing of post-2008 rules across the globe.”

She said Quarles’ background “demonstrates that he is the wrong person to lead such a review.” She called on Bailey to “consider terminating the appointment and conduct your own search for a suitable replacement.” Bailey, who is governor of the Bank of England, became FSB chair after Quarles’ appointment.

The warning came as the FSB, a global body that monitors and coordinates national financial regulations, issued new guidance on the regulation of nonbank financial groups, such as hedge funds. The guidance recommended capping the amount of borrowing these groups can do, but left up to national regulators to determine the details.

Rolling back safeguards

In the years following the 2008 global financial crisis, countries clubbed together and tasked the FSB with coordinating national regulators to prevent a similar crisis happening again.

But in 2017, with momentum shifting back to deregulation, newly-elected U.S. president Donald Trump nominated Quarles to head up the Fed’s banking supervision arm.

Warren’s main criticism of Quarles relates to his implementation of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which gave the Fed discretion to apply tougher regulatory standards to large banks with assets of between $100 billion and $250 billion.

“Under the law, Mr. Quarles had discretion to apply these rules … [but] he and other Trump-installed regulators refused to do so,” she said.

She said Quarles also led the rollback of rules prohibiting banks from making “risky proprietary bets with customer deposits and from investing in or sponsoring hedge funds or private equity funds.”

Both of these contributed to the collapse in 2023 of Silicon Valley Bank, she said.

As well as calling for Quarles’ termination, the letter asks whether his appointment is an indication that the FSB sees “this review as an opportunity to coordinate the easing of post-2008 financial safeguards.”

Neither Quarles nor the FSB immediately responded to a request for comment.