The Banking, Housing, and Urban Affairs Committee heard two important testimonies by nominees to the Fed Board on Tuesday that affirmed their commitment to the Fed’s independence to make policy decisions.
The first was by Richard Clarida, Managing Director and Global Strategic Advisor at PIMCO who has been nominated for the post of Vice-Chair at the Fed and the second was by Michelle Bowman, the State Bank Commissioner of Kansas.
In his opening remarks, Senator Mike Crapo, Chairman of the Committee said that these positions were critical to ensuring a safe, sound, and vibrant financial system and a healthy, growing economy.
Senator Sherrod Brown, ranking member of the Committee said that he wasn’t just looking at the expertise that both nominees brought to the table but at how they would approach the numerous issues considered by the Board.
If confirmed, Clarida said that his priority would be to support policies that were “effective, efficient, and appropriately tailored.” Answering questions from committee members, Clarida said that he would look at policies that preserved the far greater resiliency and stability of the financial system, “that has been achieved as a result of the significant reforms that have been put in place since the financial crisis.”
Affirming his commitment to the Fed’s independence, Clarida said: “If I am confirmed, I pledge to work closely with Chairman Powell and my future colleagues to put in place policies that best fulfill its obligation to meet the mandates that the Congress has assigned to the Federal Reserve and to foster the transparent communication and accountability that is so vital to preserving the Federal Reserve’s independent and nonpartisan status.”
Despite his academic background, Clarida is not new to an administrative role of this type. He has served in economic policy positions in the executive branch of the U.S. Government as Senior Staff economist with Council of Economic Advisers from 1986 to 1987 and then as Assistant Treasury Secretary for Economic Policy from 2002 to 2003.
Michelle Bowman comes from a family that has been in banking for generations. “I know firsthand that community banks are a vital part of the backbone of small, rural, agricultural towns and play a critical role in providing access to credit and fostering economic activity in communities across our country. Without these institutions, many communities and many of our citizens will see their economic opportunities suffer significantly,” Bowman told the committee.
Stressing on the need to treat every consumer and institution fairly, respectfully, and with open communication, Bowman told the committee that her experience as a community banker had prepared her for the role as a member of the Fed Board. “If confirmed by the Senate, I will be committed to accountability, transparency, and clear communication in all of my responsibilities at the Federal Reserve,” she said.