Two Federal Reserve Openings Provide One Chance to Counter Trump
Mr. Levin has proposed that the federal government should take ownership of the regional reserve banks, and
that the selection of regional reserve presidents should be a public process
“How monetary policy is considered seems very high-level for many people in the community,
but it has a direct impact on how well they may do economically,” Denise Scott, a member of the four-person search committee, said in a video released by the New York Fed that described what it’s looking for in a candidate.
The regional bank is responsible for implementing the Fed’s monetary policy decisions — raising or lowering interest rates through the purchase
and sale of financial assets — and it oversees many of the nation’s largest financial institutions.
“The appointment of the next New York Fed president is the most powerful appointment in America
that Donald Trump doesn’t control,” said Marcus Stanley, policy director of Americans for Financial Reform, which lobbies in favor of strong regulation.
He added, “While most decisions taken by even a Fed chairman are in the end not make-or-break,
most Fed chairs face at least one profoundly consequential decision during their tenure.”
The Trump administration has discussed some vice-chairman candidates who could fit the bill, including Lawrence B. Lindsey, a former Fed governor
and director of the National Economic Council under President George W. Bush, and Mohamed A. El-Erian, the chief economic adviser at Allianz, who is widely respected as both an investor and a commentator on monetary policy, according to a person who has participated in some of those conversations.
The divergent selection processes are an artifact of the Fed’s structure: A board of political appointees in Washington
oversees the operations of 12 regional reserve banks, which are privately owned by the commercial banks in each region.