wildcard
28th April 2010, 11:40 PM
link (http://www.bloomberg.com/apps/news?pid=20601087&sid=a55n8b20E1OE&pos=7)
We're saved! ::)
Obama Fed Picks to Help Bernanke Manage End to Record Stimulus
By Scott Lanman and Hans Nichols
April 29 (Bloomberg) -- President Barack Obama’s appointment of three Federal Reserve governors will bring the board to full strength for the first time in four years, helping Chairman Ben S. Bernanke manage a withdrawal of record monetary stimulus and an overhaul of bank supervision.
Obama today plans to announce his choice of San Francisco Fed President Janet Yellen to be vice chairman of the Board of Governors under Bernanke, according to two people familiar with the decision. Obama will also name Sarah Bloom Raskin, Maryland’s commissioner of financial regulation, and Peter Diamond, an economics professor at the Massachusetts Institute of Technology, to the seven-person board.
The three, who are subject to Senate confirmation, join the board as it considers when to signal an end to its policy of keeping interest rates low for an “extended period.†The Federal Open Market Committee yesterday renewed that pledge, prompting Kansas City Fed President Thomas Hoenig to dissent for a third straight meeting, saying the language limits the Fed’s ability to increase rates “modestly.â€Â
“This will be a group of doves slanted toward job creation and growth, increasing the likelihood of rates staying low for a long time,†said former Atlanta Fed research director Robert Eisenbeis, now chief monetary economist at Cumberland Advisors Inc. in Vineland, New Jersey.
Yellen, 63, would replace Donald Kohn, who said in March he would step down June 23 after a 40-year Fed career. She would gain a more prominent role in Fed policy with a permanent vote on the FOMC, instead of having a vote one year out of every three as a regional Fed chief. All governors have a vote on rate decisions.
‘Right Track’
In an April 15 speech, Yellen said she’s increasingly certain the U.S. economy is “on the right track,†and that officials will “at some point†need to lift borrowing costs. Still, “it’s important not to lose sight of just how fragile this recovery is,†she said.
Yellen spent most of her career teaching economics and researching labor markets, joining the University of California at Berkeley in 1980. She and her husband, George Akerlof, a Nobel Prize-winning economist, have written more than a dozen papers that included studies on unemployment, wages, street gangs and out-of-wedlock births.
In 1994, then-President Bill Clinton appointed Yellen to be a Fed governor in Washington, where she served until 1997, when she was moved to the White House to chair the Council of Economic Advisers. She left the position in 1999 to return to Berkeley.
Yellen rejoined the Fed in 2004 as president of its San Francisco district bank, which represents the largest region by area and economic output. She has always voted with the majority of policy makers on interest-rate decisions.
Regional Banks
The Fed has 12 regional Fed banks. The president of the New York Fed, currently William Dudley, has a permanent vote on the FOMC; the heads of the other regional banks rotate. The San Francisco Fed president doesn’t vote again until 2012.
Raskin, a 49-year-old attorney, was appointed in August 2007 as Maryland’s top banking regulator. She was previously managing director of Promontory Financial Group, a consulting firm, and worked at the New York Fed and as a counsel for the Senate Banking Committee. She graduated from Harvard Law School in 1986. Her husband, Jamie Raskin, is a law professor and a Democratic Maryland state senator.
Diamond, a specialist in taxation and behavioral economics who turns 70 today, has written widely on overhauling entitlement programs. His 2003 book “Saving Social Security†was co-written with Peter Orszag, director of the Office of Management and Budget. He joined MIT’s faculty in 1966.
‘Widely Respected’
“The new nominees, particularly Yellen and Diamond, are widely respected centrists who will help the chairman ensure that reason prevails in FOMC decisions,†said New York University economist Mark Gertler, who co-wrote research with Bernanke.
The Senate agreed yesterday to begin debate on a Democratic proposal for the biggest restructuring of financial-market oversight since the 1930s as Republicans abandoned their effort to stall the bill’s progress. The legislation is aimed at strengthening regulations in response to the financial crisis that led to bailouts for firms such as Citigroup Inc. and Bank of America Corp.
The bill, sponsored by Senate Banking Committee Chairman Christopher Dodd of Connecticut, would set up a new consumer- protection regulator, create a mechanism to dismantle firms whose failure threatens the financial system, and strengthen oversight of derivatives and hedge funds.
Reduced Oversight
Dodd’s bill would also strip the Fed of oversight of about 5,000 banks across the U.S. and focus its role on supervising about 36 large firms with assets of more than $50 billion. Dodd has called the Fed’s record on bank supervision “abysmal†and has said its reduced role would it allow it to focus on monetary policy.
Bernanke has said that supervising a larger number of banks allows the Fed to keep its finger on the pulse of the economy, helping its interest rate decisions. At the same time, Fed Governor Daniel Tarullo is leading an internal revamping of Fed supervision.
If confirmed by the Senate, Yellen, Diamond and Raskin would give the Fed a full seven-member complement of governors for the first time since April 2006. President George W. Bush tried to fill the slots with three nominees in 2007: Elizabeth Duke was approved in 2008, while Larry Klane and Randall Kroszner were blocked by Senate Democrats. Obama appointed Tarullo in January 2009.
The timing of the announcement fits Yellen’s schedule: She was in Washington attending the FOMC’s meeting this week. The central bank’s policy panel yesterday restated its intention to keep the benchmark interest rate near zero for an “extended period.†While Yellen doesn’t have an FOMC vote this year, all 12 regional-bank presidents participate at each meeting.
We're saved! ::)
Obama Fed Picks to Help Bernanke Manage End to Record Stimulus
By Scott Lanman and Hans Nichols
April 29 (Bloomberg) -- President Barack Obama’s appointment of three Federal Reserve governors will bring the board to full strength for the first time in four years, helping Chairman Ben S. Bernanke manage a withdrawal of record monetary stimulus and an overhaul of bank supervision.
Obama today plans to announce his choice of San Francisco Fed President Janet Yellen to be vice chairman of the Board of Governors under Bernanke, according to two people familiar with the decision. Obama will also name Sarah Bloom Raskin, Maryland’s commissioner of financial regulation, and Peter Diamond, an economics professor at the Massachusetts Institute of Technology, to the seven-person board.
The three, who are subject to Senate confirmation, join the board as it considers when to signal an end to its policy of keeping interest rates low for an “extended period.†The Federal Open Market Committee yesterday renewed that pledge, prompting Kansas City Fed President Thomas Hoenig to dissent for a third straight meeting, saying the language limits the Fed’s ability to increase rates “modestly.â€Â
“This will be a group of doves slanted toward job creation and growth, increasing the likelihood of rates staying low for a long time,†said former Atlanta Fed research director Robert Eisenbeis, now chief monetary economist at Cumberland Advisors Inc. in Vineland, New Jersey.
Yellen, 63, would replace Donald Kohn, who said in March he would step down June 23 after a 40-year Fed career. She would gain a more prominent role in Fed policy with a permanent vote on the FOMC, instead of having a vote one year out of every three as a regional Fed chief. All governors have a vote on rate decisions.
‘Right Track’
In an April 15 speech, Yellen said she’s increasingly certain the U.S. economy is “on the right track,†and that officials will “at some point†need to lift borrowing costs. Still, “it’s important not to lose sight of just how fragile this recovery is,†she said.
Yellen spent most of her career teaching economics and researching labor markets, joining the University of California at Berkeley in 1980. She and her husband, George Akerlof, a Nobel Prize-winning economist, have written more than a dozen papers that included studies on unemployment, wages, street gangs and out-of-wedlock births.
In 1994, then-President Bill Clinton appointed Yellen to be a Fed governor in Washington, where she served until 1997, when she was moved to the White House to chair the Council of Economic Advisers. She left the position in 1999 to return to Berkeley.
Yellen rejoined the Fed in 2004 as president of its San Francisco district bank, which represents the largest region by area and economic output. She has always voted with the majority of policy makers on interest-rate decisions.
Regional Banks
The Fed has 12 regional Fed banks. The president of the New York Fed, currently William Dudley, has a permanent vote on the FOMC; the heads of the other regional banks rotate. The San Francisco Fed president doesn’t vote again until 2012.
Raskin, a 49-year-old attorney, was appointed in August 2007 as Maryland’s top banking regulator. She was previously managing director of Promontory Financial Group, a consulting firm, and worked at the New York Fed and as a counsel for the Senate Banking Committee. She graduated from Harvard Law School in 1986. Her husband, Jamie Raskin, is a law professor and a Democratic Maryland state senator.
Diamond, a specialist in taxation and behavioral economics who turns 70 today, has written widely on overhauling entitlement programs. His 2003 book “Saving Social Security†was co-written with Peter Orszag, director of the Office of Management and Budget. He joined MIT’s faculty in 1966.
‘Widely Respected’
“The new nominees, particularly Yellen and Diamond, are widely respected centrists who will help the chairman ensure that reason prevails in FOMC decisions,†said New York University economist Mark Gertler, who co-wrote research with Bernanke.
The Senate agreed yesterday to begin debate on a Democratic proposal for the biggest restructuring of financial-market oversight since the 1930s as Republicans abandoned their effort to stall the bill’s progress. The legislation is aimed at strengthening regulations in response to the financial crisis that led to bailouts for firms such as Citigroup Inc. and Bank of America Corp.
The bill, sponsored by Senate Banking Committee Chairman Christopher Dodd of Connecticut, would set up a new consumer- protection regulator, create a mechanism to dismantle firms whose failure threatens the financial system, and strengthen oversight of derivatives and hedge funds.
Reduced Oversight
Dodd’s bill would also strip the Fed of oversight of about 5,000 banks across the U.S. and focus its role on supervising about 36 large firms with assets of more than $50 billion. Dodd has called the Fed’s record on bank supervision “abysmal†and has said its reduced role would it allow it to focus on monetary policy.
Bernanke has said that supervising a larger number of banks allows the Fed to keep its finger on the pulse of the economy, helping its interest rate decisions. At the same time, Fed Governor Daniel Tarullo is leading an internal revamping of Fed supervision.
If confirmed by the Senate, Yellen, Diamond and Raskin would give the Fed a full seven-member complement of governors for the first time since April 2006. President George W. Bush tried to fill the slots with three nominees in 2007: Elizabeth Duke was approved in 2008, while Larry Klane and Randall Kroszner were blocked by Senate Democrats. Obama appointed Tarullo in January 2009.
The timing of the announcement fits Yellen’s schedule: She was in Washington attending the FOMC’s meeting this week. The central bank’s policy panel yesterday restated its intention to keep the benchmark interest rate near zero for an “extended period.†While Yellen doesn’t have an FOMC vote this year, all 12 regional-bank presidents participate at each meeting.