News / Economy

New US Central Bank Chief Now an Open Question

Janet Yellen answers a question from a participant at the International Monetary Conference in Shanghai, China, June 2013 file photo..
Janet Yellen answers a question from a participant at the International Monetary Conference in Shanghai, China, June 2013 file photo..
VOA News
The withdrawal of the leading candidate to head the U.S. central bank leaves it an open question who President Barack Obama might name to succeed outgoing Chairman Ben Bernanke.

A key White House economic adviser in the early years of Obama's presidency, Lawrence Summers, withdrew his name Sunday from consideration to lead the Federal Reserve, the country's key monetary policy agency and an important link in the world economy.

His withdrawal could lead to the appointment of the first woman chairman of the Fed, Janet Yellen, currently the central bank's vice chairman. But other economic leaders could also be named.

One leading U.S. economist, Jim O'Sullivan of High Frequency Economics, said Yellen is the likely choice and would lead to a continuation of Fed support for the American economic recovery.

"Certainly the expectation now is that it will be the vice chair, Janet Yellen," he said. "Obviously, she was the favorite a few months ago, and I would say she's the favorite again now. That certainly would be continuity in terms of current policy."

Washington officials believed Summers, a former Harvard University president, was Obama's first choice to replace Bernanke, when his term expires in January. But several Democratic senators had voiced opposition to Summers' possible appointment, telling the White House that he was too lax on financial regulation.

In a letter to the president, Summers said hearings on his confirmation by the Senate would have been acrimonious and would not have been helpful for the country's economic recovery from the depths of the 2009 recession.

Obama has not publicly said when he plans to name Bernanke's successor. The president has said he has interviewed Donald Kohn, a former Fed vice chairman. Some leading economists in the country are supporting Yellen's appointment.

Speculation over a new central bank chief comes at a key time. Federal Reserve policy makers are meeting this week to decide whether to curtail the economic stimulus measures they have used to try to boost the U.S. economy, the world's largest.

The Fed has been buying $85 billion worth of securities a month to put more money into the economy, but says it may start to trim the purchases and end them altogether by mid-2014. U.S. economic growth has been modest, with expansion of the labor market weakening in recent months.

This week is the fifth anniversary of the start of the world economic downturn, with the collapse of Lehman Brothers, a U.S.-based investment bank.  Obama said the U.S. economy has advanced since then, but that the labor market needs to expand and looming government spending and debt issues need to be resolved quickly.

The United States in the last five years has imposed new restrictions on operations at large banks, but O'Sullivan said the regulations may not be sufficient to prevent another meltdown.

"I guess I'd have to say no, in the sense that there's certain things perhaps you can't control for," he said. "Certainly, this crisis is going is going to be in our memory for awhile, and I think that will influence behavior, as well as the actions of regulators. But I mean, that said, there are limits to what can be controlled through regulation."

You May Like

UN Ambassador Power Highlights Plight of Women Prisoners

She launches the 'Free the 20' campaign, aimed at profiling women being deprived of their freedom around the world More

Satellite Launch Sparks Spectacular Light Show

A slight delay in a satellite launch lit up the Florida sky early this morning More

Fleeing IS Killings in Syria, Family Reaches Bavaria

Exhausted, scared and under-nourished, Khalil and Maha's tale mirrors those of thousands of refugees from war-torn countries who have left their homes in the hopes of finding a better life More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Nobel Prize Winner Malala Talks to VOAi
X
August 31, 2015 2:17 AM
Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.

VOA Blogs

World Currencies

EUR
USD
0.8916
JPY
USD
121.32
GBP
USD
0.6487
CAD
USD
1.3252
INR
USD
66.401

Rates may not be current.