Elizabeth Warren Just Asked Janet Yellen If She Was Ready To Sink The Fed's Teeth Into Wall Street

Senator Elizabeth Warren (D-Mass.) just finished questioning prospective Fed Chair Janet Yellen, and all of her questions boiled down to one idea - would Yellen's Federal Reserve be willing to elevate policing Wall Street to the level of importance of its dual mandate?

What Warren is suggesting is something like a new Fed Trinity - a tripartite mandate. She wants Yellen to add regulatory tenacity to the Fed's commitment to stabilizing prices and maximum employment.

As Warren opened her line of questions, she said she was concerned that, in the past, the Fed Board of Governors had not taken Wall Street regulation "seriously."

"Even now after the biggest financial crisis in generations ... The Board seems willing to delegate regulatory activities," said Warren, adding that supervisory and regulatory meetings should be made more regular.

Basically, Yellen agreed with that.

"We need to devote just as much time and attention ... to regulatory policy as we do to monetary," said the likely Fed Chair.

BUT (and there always seems to be a "but") Yellen also said that the Fed faced certain restrictions on its ability to discuss regulatory issues together - "our ability to do so outside of open meetings is limited," she said.

To deal with that, Yellen explained, Board members have been meeting in small groups and using committees to handle specific areas of regulation. Those committees then make recommendations to the Board.

Warren seemed pleased with that answer, and said she hoped that Yellen would be confirmed, but that didn't mean she wasn't going hold back on her last question.

"Do you think the Fed's lack of attention to regulatory and supervisory responsibilities helped lead to the crash of 2008?"

Rough.

"I think in the aftermath of the crisis we've tried to look back ... at what we should've done differently," Yellen answered carefully "We've massively revamped our supervision, particularly of the largest institutions."

Now, for example, the Federal Reserve System works jointly on reviews of big banks instead of leaving that to regional reserve banks, ended Yellen.

Warren got in the last word, saying "engaging in the supervisory and regulatory responsibilities that help keep our financial system safe - that can't just be an afterthought but a primary effort on your part."

If Warren thinks it is, it's certain Yellen won't be hearing the end of it any time soon.