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Delivered daily by 8 a.m., Morning Money examines the latest news in finance politics and policy. | | | | |  | | By Kate Davidson and Sam Sutton | Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our s each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro . IT’S MARTY — The White House made it official on Monday, announcing the president’s intent to nominate Marty Gruenberg as the permanent chair of the Federal Deposit Insurance Corp. Gruenberg, who’s been in the acting role since February, would become the first FDIC chair to be renominated for a second term leading the board of the independent bank regulator. (He was chair of the board from 2012 to 2018, and has served in the acting role twice before.) While Gruenberg might have seemed a shoo-in, it wasn’t obvious he would get the nod. The White House discussed the job with other candidates, including Adrienne Harris, superintendent of the New York State Department of Financial Services, sources have told MM. And there was speculation that progressives wanted a nominee who would bring more diversity to the board. In the end, the administration went with the guy with 17 years of experience at the agency — Gruenberg has been there in some capacity since 2005 — who is also a known quantity to the banking industry. Sure, he has irked the industry over the years (see: Operation Chokepoint; deposit insurance fees), but he’s unlikely to face big industry opposition to his nomination. That can’t be said for some earlier Biden financial nominees.
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The White House said it would nominate Acting FDIC Chairman Martin Gruenberg to helm the agency. | Andrew Harnik/AP Photo | Progressives, including Senate Banking Chair Sherrod Brown (D-Ohio) and Sen. Elizabeth Warren (D-Mass.), praised the pick. Gruenberg also got a strong endorsement Monday night from Sheila Bair , who worked closely with him as the board’s Republican-appointed chair from 2006 to 2011. “He will get confirmed in my opinion,” said Cam Fine, president and CEO of Calvert Advisors, who said Gruenberg “may not be totally to the liking” of moderate Democrats, but would likely get their support anyway (and maybe even pick up a Republican vote or two). As for Republicans — Rep. Patrick McHenry (R-N.C.) blasted the move, citing Gruenberg’s role in circumventing former GOP Chair Jelena McWilliams and saying the nomination “shows this administration has no plans to work across the aisle to build a more inclusive financial system.” MM sidebar: The scars of McWilliams’ departure, still fresh for Republicans, could also lead to uncomfortable politics within the agency, if all the nominees are confirmed. Travis Hill, as one of McWilliams’ closest advisers, had a front row seat to the entire situation. Now, he could become Gruenberg's vice chair. BANK REGULATORS TO THE HILL — We’ll hear from Gruenberg and his counterparts at the other regulatory agencies today, when they head up to the Senate Banking Committee for the first of two days of congressional testimony. The crypto market meltdown is expected to take center stage, and Brown will call out some of the mayhem in his opening remarks, according to excerpts shared with MM: “Workers and small businesses who are already struggling under the weight of inflation shouldn’t get hit with exorbitant bank fees, lose their money to a crypto scam, or worry that their savings will disappear overnight if a mismanaged bank or credit union fails,” he’ll say. And on monitoring risks: “At the same time, our regulators are looking out for risks on the horizon – the effects of climate change, the rise in crypto assets, the risks from shadow banks, and the constant threat of cyberattacks … They’ve stepped up to protect depositors and consumers when crypto firms mislead them into thinking their money is safe when it isn’t.” IT’S TUESDAY — Send us your tips, story ideas or feedback: kdavidson@politico.com and ssutton@politico.com .
| | | | POLITICO APP USERS: UPGRADE YOUR APP BY DECEMBER 19! We recently upgraded the POLITICO app with a fresh look and improved features for easier access to POLITICO's scoops and groundbreaking reporting. Starting December 19, users will no longer have access to the previous version of the app. Update your app today to stay on top of essential political news, insights, and analysis from the best journalists in the business. UPDATE iOS APP – UPDATE ANDROID APP . | | | | | | | | Fed Governor Lisa Cook speaks at 9 a.m. … Bank regulators testify at the Senate Banking Committee at 10 a.m. … Household debt data released at 11 a.m. … The SEC holds its securities enforcement forum, featuring keynote remarks from SEC enforcement director Gurbir Grewal at 12:35 p.m. ... New York DFS Superintendent Adrienne Harris speaks at a Brookings Institution event on digital assets at 2 p.m. FTX CRASH HAMMERS WASHINGTON — From Sam and Declan Harty: “The collapse of crypto exchange FTX has thrown Washington’s game plan for regulating digital currencies into limbo — and revealed just how little visibility officials have into the market.” — “You would’ve thought that I’d be getting no sleep right now, and instead I’m getting some,” Bankman-Fried told NYT’s David Yaffe-Bellany in an interview on Sunday. “It could be worse.” — WSJ’s Dave Michaels: “The Manhattan U.S. attorney’s office is investigating FTX’s collapse , according to people familiar with the matter.” — The FT got a hold of a balance shee t Bankman-Fried sent investors as he sought rescue financing for FTX. — Bloomberg’s Annie Massa: “What’s only now becoming clear is just how much of [Bankman-Fried’s] cash, which ascribed value to countless crypto projects out of thin air , was coming from his complex web of 130-plus now-bankrupt entities.” — Binance CEO and co-founder Changpeng “CZ” Zhao announced early Monday morning that his exchange – which briefly angled to provide rescue financing to FTX before pulling out – would form “ an industry recovery fund ” to backstop startups whose finances have been hammered by market volatility. — Semafor’s Bradley Saacks: “Senior employees who work at FTX in the Bahamas, where the embattled crypto exchange is headquartered, have left for Hong Kong and elsewhere in recent days. ” — CNBC’s Brian Schwartz: “Lobbyists who worked for FTX and Guarding Against Pandemics, a nonprofit partially funded by Bankman-Fried and run by his brother, Gabe Bankman-Fried, told CNBC that they have severed ties with the cryptocurrency exchange after its collapse.” — Lawmakers are starting to donate funds that Bankman-Fried and other FTX executives had contributed to their campaigns, per The Block. DEMOGRAPHICS — The world’s population is projected to reach an estimated eight billion today , according to the UN. In the U.S., however, population growth has been shrinking for more than a decade (see the chart below) and the trend is unlikely to reverse, according to new research and analysis from economists Melissa Kearney and Phillip Levine , set to be released as part of the Aspen Economic Strategy Group’s annual policy volume next month.
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U.S. population growth has been slowing for more than a decade. | Aspen Economic Strategy Group | Births are down 18 percent since 2007 and the U.S. fertility rate is below replacement level. That could lead to slower population growth, and in turn slower economic growth, they write. “The slowdown in native population growth could be addressed with increased immigration and advances in productivity.” GOP LIKELY TO RETAKE THE HOUSE — Our Zach Montellaro : “Democrats’ slim hopes to retain the House majority appeared to dim on Monday, with the party likely not having enough runway in the remaining uncalled seats to squeak out a win.”
| | | TIME TO SLOW? — Bloomberg’s Matthew Boesler, Catarina Saraiva and Craig Torres: “Federal Reserve Vice Chair Lael Brainard said the central bank should soon moderate the size of its interest-rate increases , signaling she favors slowing to a half-point hike as early as next month. “‘It will probably be appropriate soon to move to a slower pace of increases,’ Brainard said Monday in a fireside-chat event at Bloomberg’s Washington bureau. ‘But I think what’s really important to emphasize: We’ve done a lot, but we have additional work to do.’” WHAT’S TO BLAME FOR INFLATION — Glenn Hubbard, former chair of President George W. Bush’s Council of Economic Advisers, writes in the FT: “While the central bank can be faulted for misjudging the state of aggregate demand and remaining behind the curve for so long, fiscal policy also contributed significantly to pushing up inflation.” He also offers three lessons for policymakers today.
| | | TECH LAYOFFS — WSJ’s Sebastian Herrera: “Amazon.com Inc. is preparing layoffs that could total about 10,000 workers as the company continues a broad cost-cutting review led by Chief Executive Andy Jassy, a person familiar with the matter said.” INFLATION COMES FOR MINIMUM WAGE — NYT’s Patrick McGeehan: “New York was at the forefront of the movement to raise living standards for workers in the fast-food industry and other low-paying sectors. But in recent months, as the costs of rent, groceries and utilities have surged, the minimum wage in a growing list of cities, including Washington, Los Angeles and Denver, has vaulted past.”
| | | Josh Drobnyk has joined FTI Consulting as a managing director in its strategic communications and public affairs practice. Drobnyk, who was most recently vice president for communications at Caribou, previously worked as vice president of corporate relations and communications at Robinhood Jeremy Wiggins is now a portfolio analyst in the office of the president at the World Bank. He most recently was associate officer in the executive office of the Secretary-General of the United Nations and is a Trump NEC alum.
| | | | GO INSIDE THE MILKEN INSTITUTE FUTURE OF HEALTH SUMMIT: POLITICO is featuring a special edition of our “Future Pulse” newsletter at the 2022 Milken Institute Future of Health Summit from Dec. 6 to 8. The newsletter takes readers inside one of the most influential gatherings of health industry leaders and innovators solving the biggest global health issues to ensure a healthier, more resilient future for all. SUBSCRIBE TODAY TO RECEIVE EXCLUSIVE COVERAGE . | | | | | | | | The Treasury Department on Monday imposed sanctions on four dozen people across six countries, and companies associated with them, an effort to tighten the U.S. campaign of economic pressure on Russia. — WSJ’s Ian Talley The US government can’t discharge any student loans under President Joe Biden’s massive debt forgiveness plan because a federal appeals court blocked the program indefinitely. — Bloomberg’s Madlin Mekelburg The Transportation Department said on Monday that it had fined a half-dozen airlines a total of more than $7 million for failing to provide timely refunds to customers. The department’s intervention contributed to the airlines’ issuing more than $600 million in refunds, it said. — NYT’s Niraj Chokshi | | | | Follow us on Twitter | | | | Follow us | | | | |  |
