The letter, spearheaded by Sen.
Advertisement
The Federal Reserve, under bipartisan fire for its handling of the economy, could face major changes no matter who becomes the next president.
Currently, regional reserve bank boards have nine directors: six are elected by member banks, with three representing commercial banks and three representing the public. Of the 12 regional bank presidents, none are black and 10 are men.
Federal Reserve Chair Janet Yellen said on Thursday that while she “would not completely rule out the use of negative interest rates in some future very adverse scenario”, the tool would need a lot more study before it could be used in the United States.
The statement puts Clinton on the same page as her rival, Vermont Sen. Bernie Sanders (I-Vt.). Sanders proposed barring financial executives from sitting on the boards of the 12 regional Federal Reserve banks in an op-ed in The New York Times in December.
Janet Yellen can’t catch a break this election season. Warren and Sanders are the most outspoken Democratic critics on economic and financial issues. They complained that “the voices of women, African Americans, Latinos, and representatives of consumers and labor are excluded from key discussions”.
Donald Trump, the GOP’s presumptive nominee, did not return a request for comment. Mester has a vote on the Fed’s rate-setting committee this year under a rotation system. Mr. Levin also called for directors representing firms regulated by the central bank to be removed.
In addition, an analysis by the progressive Center for Popular Democracy found that 83 percent of the boards of directors are white and three-fourths are male.
Under current law, the Fed’s boards of directors are required to include representatives from the banking industry.
A Fed spokesman, David Skidmore, responded that the central bank is “committed to fostering diversity – by race, ethnicity, gender and professional background – within its leadership ranks”.
The criticism comes in the midst of a controversial debate within the central bank. George votes on the U.S. Federal Reserve ‘s policymaking committee and was the only member to vote for a rate hike at its April and March meetings. Prices on futures contracts for the Fed’s target range suggest investors expect only one hike this year, likely in December.
The letter from Democrats also advocated for caution in monetary-policy decision-making at upcoming meetings, taking into consideration how policy would affect average Americans.
Advertisement
The Democratic lawmakers 11 senators and 116 in the House expressed their concerns in a letter Thursday to Yellen. The Fed can only provide help to a broad group of borrowers, not to individual institutions, she said. The latest annual report for the Washington-based board of governors found minorities made up just 18 percent of top management in 2015, down from 21 percent the previous year.
