Fed’s Bostic says hiring process for regional presidents “has worked well”

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WASHINGTON, Sep 30 (Businesshala) – Atlanta Federal Reserve Chairman Rafael Bostic said on Thursday that he welcomed the board of governors’ ethics review following the resignations of two of his colleagues this week and felt the Fed’s need to replace them. The process is diverse enough to be sure. Groups of applicants are considered for high-profile jobs.

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Bostic told reporters, “The world has evolved so I think it is entirely appropriate for us to review the rules and make the changes that we think need to be made to maintain … believe.” He said he was also asking the Atlanta Fed general counsel “to see if we have suggestions on how things can be adjusted.”

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The Fed, which considers itself a technology removed from politics, has been shaken this month by reports that the heads of two of its 12 regional banks will actively trade in stocks and other securities during 2020. as the Fed launched a massive rescue effort. economy from the pandemic. Dallas Fed Chairman Robert Kaplan and Boston Fed Chairman Eric Rosengren both announced their resignations on Monday, though each maintained their actions and were approved by local ethics officials.

Fed Chair Jerome Powell has conducted a comprehensive review of the system’s ethics rules and promised changes to boost confidence in the way central banks use their immense powers. He is awaiting word by President Joe Biden on his possible reappointment for a second term as Fed chairman, and the controversy has given his critics a new line of argument about his oversight of the institution.

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It has also renewed long-standing calls to reform the Fed’s mysterious structure and the selection process, especially for regional bank presidents. While the hiring authority is split between private boards that oversee the 12 regional banks and the Fed’s Washington-based and president-appointed Board of Governors, there is no public scrutiny or review of candidates for the job, similar to Senate hearings. Is. Confirmation that the Fed governor himself passes.

It criticized the process with modern demands for transparency for policy-making positions and leading to clubbishness in appointments.

When Bostik was hired in 2017, for example, he was the first African-American to head one of the Reserve Banks, and the process to replace Kaplan, a former Goldman Sachs executive and career Fed employee Rosengren, is closely followed. Will be investigated.

Bostic said he felt the current system “worked really well. What we’ve seen over the past several years is an increased focus on ensuring that the application process … Oversees a diverse set of career paths and backgrounds.”

In addition, he said, governors in Washington “will monitor to make sure that each Reserve Bank board is thinking about this in an open manner.”

Reporting by Howard Schneider; Editing by Andrea Ricci

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