U.S. Representative Barney Frank, the senior Democrat on the House Financial Services Committee, is pushing to remove the power regional Federal Reserve Bank presidents have to weigh in on interest-rate decisions.
Frank, a Massachusetts Democrat, introduced legislation today that would remove from the 12-member Federal Open Market Committee the five rotating regional representatives. The 12 regional presidents are each selected by a nine-member board and approved by the Fed’s Board of Governors.
“Under current law, more than one-third of the votes cast are made by regional Federal Reserve representatives — people who are neither appointed by the President nor subject to Senate confirmation,” Frank said today in a statement. “These men and women are chosen by a self-perpetuating group of private citizens who disproportionally represent the private financial services industry.”
Frank, the former chairman of the Financial Services panel, will need Republican support to move his bill through the House, which is controlled by Republicans. The measure would not affect the seven president-appointed Fed governors.
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