Greg Ip and John D. McKinnon write in the Wall Street Journal:
The White House announced that President Bush will nominate Kevin M. Warsh, a White House adviser on domestic finance and capital markets, and Randall S. Kroszner, who teaches at the University of Chicago's Graduate School of Business.
...
The nominations come as Alan Greenspan prepares to step down Tuesday after 18½ years as chairman. Ben Bernanke, a monetary economist who is chairman of Mr. Bush's Council of Economic Advisers, is scheduled to succeed him Wednesday. He awaits Senate confirmation, tentatively expected Tuesday.
Mr. Bernanke created one of the vacancies when he quit as a Fed governor to go to the White House last summer. Edward Gramlich, appointed by President Clinton, stepped down as a Fed governor in August.
The nominations would tilt the board's composition toward financial-industry expertise rather than macroeconomics. Mr. Warsh, a lawyer by training, was an investment banker at Morgan Stanley before joining the White House National Economic Council. He has been the White House's point person on financial-industry issues. Mr. Kroszner, who served on the Council of Economic Advisers during Mr. Bush's first term, specializes in banking, banking regulation, international-financial crises and monetary economics.
...
Of the five governors, three have primarily a financial-industry background. Mark Olson was a banker, Capitol Hill aide and consultant. Susan Bies, a Ph.D. economist, was an executive at First Tennessee National Corp., a regional bank. Vice Chairman Roger Ferguson, who has a Ph.D. in economics and a law degree, was a consultant specializing in the financial industry.
Obviously there will be more to write about this over the coming days and weeks. Professor Kroszner is definitely qualified for the post. I'm not entirely sure yet what to make of the Warsh nomination. Expect questions on his experience outside the administration. Some people questioned Ben Bernanke about his ability to distance himself from the executive branch where he had served as an adviser. Admittedly, potential chairmen get more intense scrutiny than a nominee for a governorship. Still, I would expect that people will want to know where Mr. Warsh stands on policy and regulatory issues. I expect an interesting set of hearings, probably not quite at the level of the Alito hearings, but more intense than the typical hearings for a Fed governor.
Leave a comment