March 29, 2018 / 7:40 PM / 21 days ago

Fed official pushes back on calls for more congressional oversight

NEW YORK (Reuters) - A Federal Reserve policymaker pushed back on calls from two U.S. senators for the nominee to a high-profile job at the Fed to testify before Congress, saying such a rule could hurt the central bank’s independence from political pressure.

U.S. Democratic senators Elizabeth Warren and Kirsten Gillibrand in recent days have separately called for more congressional oversight and criticized what they called a lack of transparency and candidate diversity in the selection of a new president for the New York Fed.

Warren zeroed in on a newspaper report that John Williams, the San Francisco Fed president, was the front-runner for the job, saying he and the New York Fed directors who selected him should first testify before a Senate committee about his qualifications and how he was chosen.

“If that’s the case, I’d worry about the independence of the Fed,” Philadelphia Fed President Patrick Harker told reporters when asked about the political criticism.

“While (the idea) has some appeal ... there are unintended consequences and some of that would be a diminution of the independence, ... whether it’s a reality or perceived, of the Federal Reserve system,” he said. “I think that is a significant problem.”

Harker added there were “absolute advantages” to more transparency in the process and the Fed should do better. But he warned that congressional testimonies or publishing lists of candidates could “preclude a set of very high accomplished and qualified candidates from even entering the pool.”

“That’s human nature,” he said. “I don’t think you’re going to be able to change that.”

Reporting by Jonathan Spicer; Editing by Chizu Nomiyama

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