A call for congressional hearings examining allegations of lax management at the Federal Reserve Board hit home with at least one central bank governor last week.
"There is compelling evidence that business-as-usual should not continue at the Fed, especially when budgetary excesses at the Fed represent a direct cost to taxpayers," Sens. Byron Dorgan, D-N.D., and Harry Reid, D- Nev., wrote in a letter to Senate Banking Committee Chairman Alfonse M. D'Amato.
The hearings would focus on a March 26 General Accounting Office study criticizing Fed management practices. It found the Fed's operating expenses increased to $2 billion in 1994 from $1.35 billion in 1988, a jump of nearly 50% and twice the rate of inflation. The congressional watchdog agency also reported the Fed has built a $3.7 billion surplus and called for the funds to be returned to the U.S. Treasury.
With the report in mind, Fed Governor Lawrence B. Lindsey was quick to correct himself during a speech at the National Association of Business Economists.
"We are kind of sheltered over there in our great, marble palace," Mr. Lindsey began to say, before quickly starting over. "We are kind of sheltered over there in our frugal but great marble palace."
The Federal Reserve Bank of Atlanta has lured Robert A. Eisenbeis from Chapel Hill, where he is the Wachovia professor of banking and associate dean at the University of North Carolina's Kenan-Flagler Business School.
Mr. Eisenbeis will join the Atlanta Fed May 15 as director of research and one of a handful of senior vice presidents. Now that he's becoming a regulator again, Mr. Eisenbeis will have to give up his seat on the Shadow Financial Regulatory Committee.
Before he joined the North Carolina faculty in 1982, Mr. Eisenbeis worked 15 years at the Federal Reserve Board and the Federal Deposit Insurance Corp. He is the co-author of five books on banking.
"Bob Eisenbeis brings to the job a wealth of experience and a strong reputation arising from his past work on economic, bank structure, bank regulatory, and payments system issues," said Jack Guynn, the Atlanta Fed's president and chief executive officer.
"The breadth and depth of his experience will help our bank build on the major contribution we are already making to research and debate on important public policy issues."
Mr. Eisenbeis said he is anxious to help Mr. Guynn formulate monetary policy positions. Despite working in the same field, the two men only recently became acquainted. "We met and, I think, hit if off very well," Mr. Eisenbeis said. "Jack's a really enlightened guy."
Roger L. Fitzsimonds, chairman and chief executive of Milwaukee-based Firstar Corp., was elected 1996-1997 president of the Bankers Roundtable at the trade group's annual meeting in Phoenix this month.
He replaces Chase Manhattan Corp. president and chief operating officer Thomas G. Labrecque. The roundtable's new vice president is Frank V. Cahouet, chairman and chief executive of Mellon Bank Corp.