Saturday 24 February 2018

Larry Summers closer to Fed top spot

Influential US economist Larry Summers. Photo: Getty Images
Influential US economist Larry Summers. Photo: Getty Images
Sarah McCabe

Sarah McCabe

WHO will fill the most important job in finance in the world? Today we are closer to finding out.

Japan’s Nikkei newspaper has reported that US President Barack Obama will name former Treasury Secretary Larry Summers as chairman of the Federal Reserve Board, the head of the US central banking system.

The newspaper, quoting unnamed sources, said Obama was "in the final stages" of naming Mr Summers.

It said the president is set to name Summers as early as late next week, after the Fed's interest rate committee meets on Tuesday and Wednesday. The appointment must also be approved by the Senate.

He would then take over the job in January when Mr Bernanke’s term expires.

Many Democrats have been very critical of Mr Summers for easing banking restrictions and not regulating derivatives when he was treasury secretary in the 1990s during the presidency of Bill Clinton. He was heavily involved in the controversial abolition of the Glass-Steagall Act which allowed retail banks to get involved in more speculative activity, a decision that contributed to the 2008 global financial meltdown.

The other hotly-tipped candidate for the top job was Fed Vice Chairman Janet Yellen, who until recently was considered the front-runner for the job.

Polls suggest that Mr Summers would favour tighter fiscal policies and smaller stimulus packagaes than Ms Yelle..

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