Obama names three to Fed board
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President Obama on Thursday nominated three people to the Federal Reserve who, if confirmed, would give the president five of seven bank governors and a chance to refocus the financial institution at the heart of the nation’s economy.
The White House announced the three board nominations Thursday morning. All require Senate confirmation.
The White House said the nominees are Janet Yellen, president of the San Francisco Federal Reserve Bank, to be the board’s vice chairman. Massachusetts Institute of Technology economist Peter Diamond and Maryland state banking regulator Sarah Bloom Raskin were also named.
“The depth of experience these individuals bring in economic and monetary policy, financial regulation, and consumer protection will make them tremendous assets at the Fed. I am grateful they have chosen to dedicate their talents to serving the American people,” Obama said in a prepared statement.
The nominations come as the Fed has played a pivotal role helping steer the nation out of the worst recession since the 1930s. There have also been political complaints about the central bank’s role in helping bail out some major financial firms in 2008.
Complicating the Fed’s future role is pending financial overhaul legislation that would change the financial system, and the the possibility that the Fed could gain some responsibilities.
Most people usually hear of the Fed in connection with its decisions on interest rates, which are eventually felt by borrowers including mortgage-seekers. Just Wednesday, the Fed announced it would hold rates at historic lows for an “extended period” to help the economic recovery.
As vice chair, Yellen would become the second-highest ranking Fed official, and would help Chairman Ben Bernanke, who was chosen by Obama for his current second term. Yellen was a top advisor to President Clinton.
Diamond is considered an expert on Social Security, pensions and tax issues. Raskin, who served as counsel to the Senate Banking Committee, would expand the Fed’s expertise over financial regulation.
--Michael Muskal
