Fed Nominees Pledge Action to Raise Speed of Recovery
President Obama's three nominees for seats on the Federal Reserve Board told lawmakers today that they would support policies to encourage more economic growth and be stronger regulators of financial institutions.
The central bank "must craft policies that ensure the country accelerates its recovery path and avoid any threats to price stability,'' said San Francisco Federal Reserve Bank President Janet Yellen, who has been nominated to be vice chairman of the Federal Reserve Board.
She said they want to ensure that they don't "inadvertently discourage,'' business lending.
Yellen made her comments at a confirmation hearing held by the Senate Banking Committee.
Maryland Commissioner of Financial Regulation Sarah Bloom Raskin echoed Yellen's sentiments and noted that while "the worst of the crisis is over it remains a precarious time for many people.''
She said there needs to be a "broad and sustained economy'' that includes more bank lending.
Raskin, who has been nominated to be a Federal Reserve Governor, attributed some of the problems in the lending sphere to a lack of qualified borrowers in some areas but also said some banks have been reluctant to lend money because of economic uncertainty.
Massachusetts Institute of Technology Professor Peter Diamond said his expertise in risk management would help the Fed develop policies in that area that would decrease the likelihood that another financial crisis would occur.
Diamond, who was a mentor to Federal Reserve Chairman Ben Bernanke, said he would focus on the "intersection of an individual bank's risk to the broader issue of systemic risk."