Federal Reserve Is Economical with the Truth...
Gillian Tett:
FT.com / Global insight - Future in doubt for New York Fed chief with a ‘scarlet letter’: Is William Dudley, the doughty president of the New York Federal Reserve Bank, going to be pushed out? That is a question that could soon be bubbling in the markets. For as US Senate and House committees scurry to harmonise their two different financial reform bills, one bone of contention is the future leadership of the New York Fed. Most notably, as my Financial Times colleague Tom Braithwaite observes, there is pressure afoot to change how the NY Fed president is selected, so that in future the candidate would be chosen by the US president and then approved by Congress. This would replace the current system, whereby the candidate is chosen by the NY Fed’s own board – a practice that has prompted charges of leaving the NY Fed president prone to excessive Wall Street control, since the board is currently dominated by bankers.
It is still unclear whether this proposal, passed by the Senate last month, will fly. Unsurprisingly, the Fed hates the idea, since it fears that it would “politicise” the Fed and undercut its inflation-fighting credentials. Fed officials also say that it is unfair to single out the NY Fed in this way as this political scrutiny would not apply to other regional Fed presidents.
Stop right there. The President of the Federal Reserve Bank of New York is the only regional bank president who is (a) ex officio the vice president of the Fed's most important decision-making committee--the Federal Open Market Committee--and (b) always a voting member of the Federal Open Market Committee. It is a different job than that of the other regional bank presidents.
The Federal Reserve spinmasters know this very well...
:-)
