The U.S. Senate confirmed President Barack Obama’s two nominees to the Federal Reserve Board with both receiving the support of at least 70 senators.
The Senate voted 70-24 to confirm the nomination of Jeremy Stein, a Harvard University professor and 74-21 to confirm Jerome Powell, an attorney and private equity investor who was a Treasury undersecretary for President George H.W. Bush.
Senate Majority Leader Harry Reid, a Democrat from Nevada, said the $2 billion trading loss announced last week at JPMorgan Chase & Co. (JPM) prompted his decision to push the nominations through and bolster the Fed’s regulatory expertise with the two nominees, both experts in financial markets.
Powell and Stein gained approval in March from the Senate Banking Committee over the opposition of Republican Senators James DeMint of South Carolina and David Vitter of Louisiana. Vitter demanded a vote on the nominees in the full chamber, saying on the Senate floor that Powell and Stein would probably back the “very dangerous” Fed policy of keeping interest rates near zero.
Senator Bob Corker, a Republican from Tennessee, said during Senate debate that he would support the nominees even as he remained concerned the central bank isn’t doing enough to ensure price stability.
“I am very concerned about the overly accommodative efforts that are taking place right now at the Federal Reserve,” said Corker. “These two nominees, candidly, do not represent the kind of more hawkish position I would like to see the Federal Reserve take,” yet “at the same time, these gentlemen both are qualified.”
At their nomination hearings before the banking committee this year, Powell and Stein emphasized their experience with capital markets. Powell highlighted his work as an investor and investment banker, and Stein discussed his research on the 1987 stock-market crash and the impact of monetary policy on the banking system.
Powell was a partner at the Carlyle Group LP (CG), a private- equity firm, from 1997 through 2005, where he led the industrial group within the U.S. buyout fund, according to a biography from the Bipartisan Policy Center, where he is a visiting scholar.
Stein served in the Obama administration from February to July 2009 as a senior adviser to the Treasury secretary and on the staff of the National Economic Council, according to Harvard’s website.
Once sworn in, they would give the Fed a complete seven- member board of governors for the first time since 2006.
The Fed’s board includes Chairman Ben S. Bernanke and Vice Chairman Janet Yellen, both economists; Daniel Tarullo, a former professor at the Georgetown University Law Center; Sarah Bloom Raskin, a former top bank regulator for Maryland; and Elizabeth Duke, who had been a community banker.
Powell will fill the term vacated by Frederic Mishkin, which expires in 2014. Stein will fill the seat of former governor Kevin Warsh, with a term that lasts through 2018.
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