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U.S. Senator Elizabeth Warren waded into last month’s turmoil in short-term funding markets, warning Treasury Secretary Steven Mnuchin not to use the incident as a rationale for weakening post-financial crisis regulations.

Warren, a front-runner in the race to challenge Donald Trump in the 2020 U.S. presidential election, sent a letter to the Treasury on Friday. In it, she sought Mnuchin’s views on what triggered the spike in rates for repurchase agreements and expressed concern about potential costs to businesses and consumers if strains persist.

She also set herself up for another fight with Wall Street, citing a Reuters article reporting that large banks were using the repo-market chaos to pressure the Federal Reserve to weaken liquidity rules “they have long despised.” Warren said she’s concerned the Financial Stability Oversight Council, whose chair is Mnuchin, might support those efforts.

“These rules were designed to ensure that banks have enough cash on hand to meet their obligations in the event of another market crash,” Warren said. “Banks are reporting profits at record levels, and it would be painfully ironic if unexplained chaos in a small corner of the banking market became an excuse to further loosen rules that protect the economy from these types of risks.”

The Treasury Department declined to comment on Warren’s letter. On Oct. 16, in response to a reporter’s question, Mnuchin rejected the notion that the U.S. government’s heavy issuance of debt triggered the tumult and instead blamed a corporate tax deadline for draining money from the banking system. The jump in rates on Sept. 17 “had nothing to do with our issuance, it had to do with the big tax day, that we were taking cash out of the market,” he said.

Banking industry complaints about regulations have gotten louder since the mid-September dislocation. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said Oct. 15 that the bank had the money and inclination to step in when rates surged, but liquidity rules prevented it from doing so.

Regulations introduced after the 2008 crisis oblige financial institutions to hold more cash and cash-like assets as a buffer against times of stress, and systemically important banks – JPMorgan is the largest in the U.S. – face year-end reviews to determine how much more common equity they must carry. Analysts at JPMorgan argued this week that money-market stress is likely to get much worse despite the Fed’s attempts to fix the problem.

The central bank has been injecting liquidity into the funding markets since Sept. 17, when the rate on overnight general collateral repo jumped to 10% from around 2%. The Fed has also begun buying Treasury bills to add reserves back into the system. These efforts have mostly calmed repo rates.

“While the Federal Reserve has taken the necessary action to ensure that markets continue to function, I am alarmed that it has been required to engage in money market interventions that have not been used since the 2008 financial crisis,” wrote Warren, a Democrat from Massachusetts.

Warren came to prominence because of her criticisms of Wall Street and calls for tougher oversight of the financial industry after the 2008 financial crisis. Her advocacy was pivotal to the creation of the Consumer Financial Protection Bureau and helped lock in her election to the Senate.

Warren asked that Mnuchin respond to these and other questions no later than Nov. 1: What are the underlying causes of the spike in borrowing rates for overnight repurchase agreements?Has FSOC learned why the Fed announced on Oct. 11 that overnight operations meant to keep the calm would be extended at least through January of next year?How will FSOC and Treasury use data on centrally cleared repo transactions to gain a further understanding of the market? Is further information needed to sufficiently monitor the short-term lending market?

With assistance from Michael Shepard, Saleha Mohsin and Anna Edgerton.

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