Chairman of the Federal Reserve


The Chairman of the Board of Governors of the Federal Reserve System is the head of the central banking system of the United States. Known colloquially as "Chairman of the Fed," or in market circles "Fed Chair" or "Fed Chief". The Chairman is the "active executive officer" (see 12 U.S.C. § 242) of the Board of Governors of the Federal Reserve, which is an independent agency of the federal government created by statute (see 12 U.S.C. § 241), as part of the Federal Reserve System.

Contents

Overview

As stipulated in the Banking Act of 1935, the chairman is one of seven members of the Board of Governors of the Federal Reserve System who are appointed by the President from among the sitting Governors.[1] The chairman is subject to Senate confirmation to a four-year term. In practice the chairman is often re-appointed, but cannot serve longer than one 14-year term as governor (or, if appointed to fill a position whose previous occupant had not served out their term, then 14 years plus the time remaining in the previous unexpired term). By law, the chairman reports twice a year to Congress on the Federal Reserve's monetary policy objectives. He or she also testifies before Congress on numerous other issues and meets periodically with the Secretary of the Treasury.

Currently, the chairman is Ben Bernanke, a South Carolina macroeconomist nominated by George W. Bush and sworn into office on February 1, 2006, for a term lasting until 2010. Bernanke succeeded Alan Greenspan, who served for more than 18 years under four U.S. Presidents.

The law applicable to the Chairman and all other members of the Board provides (in part):

No member of the Board of Governors of the Federal Reserve System shall be an officer or director of any bank, banking institution, trust company, or Federal Reserve bank or hold stock in any bank, banking institution, or trust company; and before entering upon his duties as a member of the Board of Governors of the Federal Reserve System he shall certify under oath that he has complied with this requirement, and such certification shall be filed with the secretary of the Board.

See 12 U.S.C. § 244

Chairmen of the Federal Reserve

Main article: List of Chairmen of the Federal Reserve
  1. Charles S. Hamlin (August 10, 1914 — August 10, 1916) -- Chairman of the Board of Directors of the Federal Reserve System
  2. William P. G. Harding (August 10, 1916 – August 9, 1922)
  3. Daniel R. Crissinger (May 1, 1923 – September 15, 1927)
  4. Roy A. Young (October 4, 1927 – August 31, 1930)
  5. Eugene I. Meyer (September 16, 1930 – May 10, 1933)
  6. Eugene R. Black (May 19, 1933 – August 15, 1934)
  7. Marriner S. Eccles¹ (November 15, 1934 – February 3, 1948) -- first Chairman of the Board of Governors of the Federal Reserve System[2]
  8. Thomas B. McCabe (April 15, 1948 – April 2, 1951)
  9. William McChesney Martin, Jr. (April 2, 1951 – February 1, 1970)
  10. Arthur F. Burns (February 1, 1970 – January 31, 1978)
  11. G. William Miller (March 8, 1978 – August 6, 1979)
  12. Paul A. Volcker (August 6, 1979 – August 11, 1987)
  13. Alan Greenspan² (August 11, 1987 – January 31, 2006)
  14. Ben S. Bernanke (February 1, 2006 – )

¹ Served as Chairman pro tempore from February 3, 1948, to April 15, 1948.
² Served as Chairman pro tempore from March 3, 1996, to June 20, 1996.

Historical Note

The Board of Governors of the Federal Reserve did not exist prior to the major reorganization of the Fed in 1935 (Banking Act of 1935). Prior to that time, the "Federal Reserve Board" (created in 1913 under the Federal Reserve Act) had a Board of Directors. The directors' salaries were significantly lower and their terms of office were much shorter prior to 1935. In effect, the Federal Reserve Board members in Washington, D.C. were significantly less powerful than the governors of the regional Federal Reserve Banks prior to 1935.[3]

Prior to 1935, the heads of the twelve district "Federal Reserve Banks" were called "Governors." In the 1935 act, the district heads had their titles changed to "President" (e.g., "President of the Federal Reserve Bank of St. Louis"), as part of a major shift of power to Washington.

Thus, Marriner Eccles was the first actual 'Chairman of the Board of Governors of the Federal Reserve Board.' The others prior to 1935 were 'Chairman of the Board of Directors of the Federal Reserve System,' with much more circumscribed power.

See also

References

  1. ^ Federal Reserve (January 16, 2009). "Board of Governors FAQ". Federal Reserve. http://www.federalreserve.gov/generalinfo/faq/faqbog.htm. Retrieved on 2009-16-01. 
  2. ^ Meltzer, Allan H. (2003). A history of the Federal Reserve : Volume 1, 1913 -- 1951. Chicago: University of Chicago Press. 
  3. ^ Meltzer, Allan H. (2003). A history of the Federal Reserve : Volume 1, 1913 -- 1951. Chicago: University of Chicago Press. 
  • Beckhart, Benjamin Haggott. 1972. Federal Reserve System. [New York]: American Institute of Banking.
  • Shull, Bernard. 2005. The fourth branch : the Federal Reserve's unlikely rise to power and influence. Westport, Conn.: Praeger.
  • Andrews, Edmund L. (Nov. 5, 2005). "All for a more open Fed". New Straits Times, p. 21.

External links

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