US Senate backs former BoI chief Fischer for Federal Reserve Board

A separate vote, still unscheduled, must be held to confirm Stanley Fischer's appointment as vice chairman of the US central bank.

By REUTERS
May 22, 2014 03:00
2 minute read.
stanley fischer

Former Bank of Israel director Stanley Fischer at a hearing on his nomination to be a member and vice chairman of the Federal Reserve Board of Governors in Washington March 13, 2014.. (photo credit: REUTERS)

 
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WASHINGTON - The US Senate on Wednesday approved Stanley Fischer's nomination to the Federal Reserve Board of Governors, adding a potentially influential voice to the developing debate over Fed policy in the post-crisis era.

Fischer, 70, was approved on a 68-27 vote, with all the opposition coming from Republicans. A separate vote, still unscheduled, must be held to confirm his appointment as vice chairman of the US central bank.

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The Senate could have considered both nominations back-to-back, but Republicans blocked the more rapid procedure to protest a rules change that allows Democrats to more easily move President Barack Obama's nominees, according to a Senate Democratic aide.

Senate Majority Leader Harry Reid likely will move this week to set a vote on Fischer's vice chairmanship for when the Senate returns from its Memorial Day recess the week of June 1. Analysts expect he will be handily confirmed.

But the vote on Wednesday ensures Fischer, the former head of the Bank of Israel, will attend the Fed's next policy-setting meeting in mid-June, whether as the No. 2 official or not.

Fischer is considered one of the top economic minds of his generation, both for his academic work and for his policymaking. He was the No. 2 at the International Monetary Fund during the Asian economic crisis in the 1990s and was governor of the Bank of Israel through the global financial crisis a decade later.

Over a career of academic and policy work, as well as three years as an executive at Citigroup, Fischer has emerged as a strong advocate of activist central banking - and particularly of the need to be aggressive in trying to guarantee financial stability.



At the Bank of Israel, he helped steer Israel's economy through the global financial crisis with tactics that included stricter control of mortgage lending and steady intervention in currency markets to prop up the value of the shekel.

Fischer will bring that sensibility to a Fed board that is in the midst of guiding monetary policy out of a historic period of near-zero interest rates and extensive efforts to stimulate the US economy with trillions of dollars in asset purchases.

Fischer's arrival will help bring the seven-member board back toward full strength after a period when its membership threatened to dip as low as three with the departure at the end of this month of Jeremy Stein.

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