U.S. Federal Reserve Chairman nominee Kevin Warsh testifies during the Senate Banking Committee hearing on his nomination on Capitol Hill in Washington, DC, on April 21, 2026.
Mandel Ngan | AFP | getty images
Federal Reserve chair nominee Kevin Wersh believes the Fed’s statutory independence does not fully extend to international policy issues, he said. written responses Questions from Senate Democrats about the Fed’s authority to set up swap lines were published Tuesday.
In those comments, Wersh also flatly denied having any ties to slain sex offender Jeffrey Epstein and indicated he would follow a plan to trust the Fed’s inspector general to resolve a federal criminal investigation at the Fed under its current chairman, Jerome Powell.
Swap lines have become an urgent question in Washington wall street journal Earlier this month it was reported that the United Arab Emirates had discussed an opening in talks regarding possible US assistance for any economic fallout from Iran’s war. Treasury Secretary Scott Besant later said that several countries in the Persian Gulf and Asia had requested swap lines.
Senator Elizabeth Warren, D-Mass., asked Warsh whether he believed the Fed could deny Treasury’s request to extend swap lines to a given country or whether the Fed was required to consult Treasury when opening or closing them.
Varsh answered those questions without explicitly mentioning the swap lines. He wrote, as he has written elsewhere, that “the Fed’s independence is at its greatest in the operational conduct of monetary policy,” in other words, the setting of interest rates.
He wore. “Fed officials are not entitled to the same special deference in areas affecting international finance, among other matters. In those matters, the Fed will work with the Administration and Congress,” Warsh wrote.
When Warsh was asked to elaborate on his views, he declined to comment. The Treasury and the Fed also declined to comment.
Swap lines can serve a variety of purposes. The Fed expanded its mandate to many large, developed economies during the financial crisis of 2007–2008. Those lines helped ensure that countries like Britain had enough dollars in a liquidity crisis. They were implemented as emergency measures, but they also came to be seen as a source of prestige, as few countries had them and therefore had direct access to the Fed.
The Fed generally views swap lines as a way to ensure the functioning of the market rather than as a way to provide assistance.
The US Treasury Department may also deploy swap lines. Besant last year provided Argentina with access to a treasury swap line when the peso was facing a currency crisis. But using that facility signals an immediate crisis that the UAE and others do not currently face.
The Senate Banking Committee voted along party lines on Wednesday to advance Warsh’s nomination to a vote by the full Senate. He is likely to get Senate support before Powell’s term ends on May 15.
Warsh appeared in person before the committee last week and answered written questions from senators. Senate Democrats released answers to their questions on Tuesday.
A person familiar with the responses said they were submitted to the committee on April 23, two days after Warsh’s confirmation hearing.
Committee spokesman Jeff Naft said Wednesday that Senate Republicans, who have the majority on the committee, do not plan to release Warsh’s answers in full. Individual Republicans may issue responses to Warsh.
Warsh also denied for the first time in a written response any connection to Epstein. Varsh’s name appears in the epstein files On the list of potential visitors to the Epstein gathering on St. Barth’s Island in December 2010. Warren asked Warsh if he had attended any parties or met with Epstein and his girlfriend Ghislaine Maxwell, who is serving time in prison.
Warsh was on St. Barts, he said, but did not meet Epstein. Warsh said, “I do not know these people, I have not attended any of their events, nor am I aware of having ever attended any event at which these people were present.”
Warsh’s answers also point to the controversy that has engulfed the Fed recently. Jeanine Pirro, the U.S. attorney for Washington, D.C., said Friday she will drop her investigation into cost overruns in the Fed’s ongoing building renovation. She said she would instead allow an investigation by the Fed’s Powell-appointed inspector general.
Warsh responded to a separate question about another investigation with a broader statement in support of the Fed’s inspector general. “Throughout my career, I have respected and supported the work of inspectors general and will continue to do so at the Federal Reserve if confirmed,” he wrote.