Senate backs Fischer for Fed board

Wed May 21, 2014 12:58pm EDT
 
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By Howard Schneider and Richard Cowan

WASHINGTON (Reuters) - The U.S. Senate on Wednesday approved Stanley Fischer's nomination to the Federal Reserve Board of Governors, adding a potentially influential voice to the developing debate over Fed policy in the post-crisis era.

Fischer, 70, was approved on a 68-27 vote, with all the opposition coming from Republicans. A separate vote, still unscheduled, must be held to confirm his appointment as vice chairman of the U.S. central bank.

The Senate could have considered both nominations back-to-back, but Republicans blocked the more rapid procedure to protest a rules change that allows Democrats to more easily move President Barack Obama's nominees, according to a Senate Democratic aide.

Senate Majority Leader Harry Reid likely will move this week to set a vote on Fischer's vice chairmanship for when the Senate returns from its Memorial Day recess the week of June 1. Analysts expect he will be handily confirmed.

But the vote on Wednesday ensures Fischer, the former head of the Bank of Israel, will attend the Fed's next policy-setting meeting in mid-June, whether as the No. 2 official or not.

Over a career of academic and policy work, as well as three years as an executive at Citigroup, Fischer has emerged as a strong advocate of activist central banking - and particularly of the need to be aggressive in trying to guarantee financial stability.

At the Bank of Israel, he helped steer Israel's economy through the global financial crisis with tactics that included stricter control of mortgage lending and steady intervention in currency markets to prop up the value of the shekel.

Previously, he had served as a top official at the International Monetary Fund during the Asian crisis of the 1990s, an experience that shaped his thinking about the importance of maintaining stable financial systems and capital markets to avoid broader economic problems.   Continued...

 
Stanley Fischer, the former chief of the Bank of Israel, testifies before the Senate Banking Committee confirmation hearing on his nomination to be a member and vice chairman of the Federal Reserve Board of Governors on Capitol Hill in Washington March 13, 2014. REUTERS/Yuri Gripas