Top US banking regulator resigns amid reports over toxic workplace culture

Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation (FDIC), has initiated his resignation following the release of a negative report detailing pervasive sexual misconduct and a "patriarchal" culture at the organisation.

Gruenberg, who has held various leadership roles at the FDIC since 2005, said that he would step down once a successor is appointed.

"In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed," Gruenberg announced in a public statement.

He said that he would continue his duties i the mean time, focusing exclusively on transforming the FDIC’s workplace environment.

The independent report, which was commissioned in response to allegations made in a series of Wall Street Journal articles, uncovered a workplace rife with sexual harassment, discrimination, and other forms of misconduct.

It highlighted a "widespread fear of retaliation" that discouraged employees from reporting such incidents and criticised the agency's management for inadequate and ineffective responses.

Gruenberg's resignation was prompted by bipartisan calls for his departure, including from Senator Sherrod Brown, the leading Democrat on the Senate Banking Committee.

"There must be fundamental changes at the FDIC," Brown stated.

The report specifically noted that while Gruenberg's personal behaviour was not identified as the primary cause of the toxic environment, his management style contributed to the issues.

Some employees described "deeply unsettling exchanges" with Gruenberg, characterising his demeanour as "harsh," "aggressive," and "upset".

Responding to the turmoil, a White House spokesperson expressed gratitude for Gruenberg's willingness to remain at the helm until a new chair is confirmed.

The spokesperson said that President Biden would make sure to appoint a successor who would uphold values of decency, integrity, and employee dignity at the FDIC shortly.

(With inputs from AFP)