WASHINGTON — In response to concerns raised about the importance of geographic diversity on the Federal Open Markets Committee, Rep. Barney Frank plans to amend a bill that would remove regional Fed presidents as voting members of the committee.
Rather than simply removing the five regional Fed presidents from the FOMC, leaving only the seven remaining members who are subject to Senate confirmation, the revised bill will replace the regional Fed presidents with four Senate-confirmed representatives from outside of Washington. This would leave the FOMC with up to 11 members, one fewer than is allowed under current law.
"This will ensure important policy makers are either elected or appointed by elected officials, and give geographic and occupational diversity to the views that shape the decisions that are made," Frank said Monday in a press release.
In explaining why he is proposing changes to the composition of the FOMC, Frank expressed concern that the regional Fed presidents are placing too much emphasis on fighting inflation at the expense of reducing unemployment, which is the other part of the central bank's dual mandate.
His revised proposal would call for the president to appoint four representatives from regions outside of Washington to come to the nation's capital to vote at FOMC meetings. Those four would not be employees of the Federal Reserve System.
Frank, the top Democrat on the House Financial Services Committee, introduced his bill in April. It has been referred to the domestic monetary policy subcommittee.
