Donald Kohn to Leave Fed at End of Term as Vice Chairman

March 2, 2010 by · Leave a Comment
Filed under: Policy News 

Who Obama chooses as his replacement will be very important and is to be watched.  Vice Chairman Kohn has been an establishment at the Federal Reserve for over four decades.  Even though I personally have issue with many of the policies responses in crisis, Donald does have a wealth of knowledge after being near the helm for over 40 years and they will lose some of that wisdom when he steps down at the end of his term.  Mr. President choose wisely, the markets will be watching very closely.

Vice Chairman of the Fed

Vice Chairman of the Fed

Business Week –  Donald Kohn will leave the Federal Reserve at the end of his four-year term as vice chairman after helping Ben S. Bernanke and Alan Greenspan steer the U.S. through recessions and crises.

Kohn, 67, said he is resigning June 23 after 40 years at the central bank. History will judge Chairman Bernanke and the Fed to have met challenges over the last several years “with great speed, imagination and effectiveness,” Kohn said in his resignation letter to President Barack Obama, released today by the Fed.

The departure opens a third vacancy on the seven-member Fed Board of Governors, giving Obama the chance to pick a majority of the panel after appointing Daniel Tarullo in 2009. It leaves the central bank without one of its chief policy architects and sources of institutional knowledge as the Fed prepares to unwind a record expansion of credit.

“This is a big loss,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Policy making is going to suffer. The key architect of the Fed’s communication practices for a couple of decades is gone, and the markets are going to have a harder time deciphering what the Fed is up to as a result.”

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