President Donald Trump is set to nominate former Federal Reserve economist Nellie Liang to the central bank’s board of governors, tapping an official who played a key role at the Fed in dealing with the aftermath of the 2008 financial crisis.
White House spokeswoman Lindsay Walters confirmed the president’s intention, which was first reported Wednesday by The Wall Street Journal.
Liang was tapped by then-Fed Chairman Ben Bernanke to become the first director of the bank’s Division of Financial Stability, which was created in 2010 to manage risks following the country’s worst financial crisis since the 1930s.
The division has now grown to be as large as the Fed’s monetary policy division, underscoring the importance Fed officials now put on detecting potential instability problems after missing the warning signals in 2008.
Liang, who has a Ph.D. in economics from the University of Maryland, joined the Fed in 1986 as a research economist. She left the central bank last year to become a senior fellow at the Brookings Institution, a Washington think tank. She also serves as a consultant to the International Monetary Fund.
With the nomination of Liang, Trump has now selected or re-nominated officials to fill six of the Fed’s seven board seats, including tapping Fed board member Jerrome Powell to succeed Janet Yellen as Fed chairman earlier this year after Trump decided not to offer Yellen a second four-year term.
While Trump has recently voiced criticism of the Fed’s actions to keep raising interest rates, his choices for the Fed board positions have been respected mainstream economists or highly regarded officials from the banking industry.
The Senate recently confirmed Richard Clarida to be the Fed’s vice chairman, the No. 2 post at the board. He will participate in next week’s Fed meeting when the central bank is expected to boost its key policy rate for a third time this year.
The Senate Banking Committee has also held hearings on two other Trump nominees although one of those officials, Marvin Goodfriend, an economist at Carnegie Mellon University, has drawn heavy Democratic opposition, putting that nomination in doubt.
In his first two years in office, Trump has had the opportunity to nominate officials for six of the Fed’s seven board seats. Fed board member Lael Brainard was put on the board by President Barack Obama, who also tapped, Powell, a Republican, for a board seat before Trump elevated him to be chairman.
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