Fed to Announce Task Force Staffing with Global Experts Next Week
By Michael S. Derby, Balazs Koranyi and Francesco Canepa
Federal Reserve's Upcoming Task Force Announcement
SINTRA, Portugal, July 1 (Reuters) - Federal Reserve Chairman Kevin Warsh said on Wednesday that some of the key staffing of a slate of “task forces” looking at central bank operations will be made public very soon and that non-Americans will be among these ranks.
Selection of Global Experts
“I can tell you likely next week who will be the outside experts” serving on these task forces, Warsh said at a European Central Bank panel of central bank leaders held in Sintra, Portugal. “Some of them would have been folks in seats like this in prior years, some would have been academics in the audience, but we really tried to find the best minds” in the economics community, “including people from countries outside the U.S.,” Warsh said.
International Involvement and Transparency
Warsh, who did not name any names, explained why he’s looking for help outside the U.S. Bloomberg reported Wednesday that former Bank of England leader Mervyn King, who left the bank in 2013, would helm one of the panels.
Perspectives from Abroad
“We're not asking for de Tocqueville to come to America, but sometimes we need a foreigner to sort of see things clearly, and the idea of these is not to prejudge the outcomes,” Warsh said, referring to French political thinker Alexis de Tocqueville who studied American society and politics in the 1830s.
Warsh noted he was keeping an open mind on the matter, adding that his panel could help others.
Potential Impact on Central Banking
“I think some of the lessons learned might not just be for the American central banker who's new to this crew, but my colleagues on the stage,” Warsh said, in reference to the leaders of the ECB, Bank of England and the Bank of Canada.
Scope and Focus of the Task Forces
In a press conference following the June 16-17 Federal Open Market Committee, Warsh announced five so-called task forces that would study Fed communications, the central bank balance sheet, how the Fed uses economic data, productivity and jobs and the central bank’s inflation framework.
Warsh's Leadership and Critique of Fed Practices
Warsh, confirmed to lead the Fed in May, campaigned for the leadership position by lambasting Fed conduct in recent years, calling for regime change and “breaking some heads.” He has been a staunch critic of how the Fed operates, explains itself and uses its balance sheet to support monetary policy changes, and since taking office, he has made it a regular refrain to not provide any guidance about the monetary policy outlook.
The task forces created by Warsh would serve as advisory panels for the central bank, and Warsh would need the support of the remainder of central bank leadership to translate recommendations into actual policy changes.
Historical Context of Foreign Advisors
The role of foreigners advising the Fed echoes the role Warsh has played in years past with the Bank of England, where he advised on monetary policy issues.
(Reporting by Michael S. Derby; Editing by Chizu Nomiyama, William Maclean)
