McCain would pursue strong dollar policy

WASHINGTON (Reuters) - Republican candidate John McCain would pursue a strong U.S. dollar policy as president and would be prepared to consider the "strong medicine" of intervention if circumstances demanded, his top economic adviser Carly Fiorina told Reuters on Monday.

Fiorina, a former chief executive of Hewlett-Packard Co., said the Arizona senator had a lot of confidence in Federal Reserve Chairman Ben Bernanke, would consider more regulation of credit ratings agencies, and believed government had a role in helping consumers deal with the U.S. housing crisis.

McCain, who has wrapped up his party's presidential nomination and will face Democrat Barack Obama in the November election, has said on the campaign trail it is important to "talk up" the dollar.

"It would be important for a President McCain to say loudly, clearly and often -- as he would and as he will -- that a strong dollar is in the interest of the American people and the American economy," Fiorina said in a telephone interview.

Fiorina said a McCain administration would support a strong dollar policy by reining in government spending and pushing free trade agreements to give investors around the world confidence that the dollar is a strong currency.

She said intervention would be an option that he would consider, though only under the right conditions.

"It very much depends on the circumstances," she said.

"I think John McCain is a pragmatic person. I don't think he would unilaterally remove any legitimate tool, but I think he recognizes that that would be extremely strong medicine that one would take in extremely challenging circumstances."

The dollar has endured a five-year decline that has accelerated amid a deep U.S. housing slump and a credit crunch that began last year with a wave of defaults on risky mortgages. The currency's weakness has contributed to the upward spiral of oil prices as well as other commodities priced globally in greenbacks.

FUTURE ROLE, HOUSING CRISIS

Fiorina became the head of Hewlett-Packard Co. in 1999 and in 2002 oversaw the then-largest merger in the U.S. technology sector when Hewlett-Packard bought rival computer maker Compaq Computer Corp. The company's subsequent poor performance forced her exit as chairman and chief executive in 2005.

Once considered the country's most powerful businesswoman, Fiorina has become an increasingly visible advocate for McCain. She declined to speculate on her role in a possible administration, saying only it would be an honor to serve.

"It is John McCain's decision as to who he puts in his cabinet or who he puts on his ticket or anything else," she said.

Turning to the U.S. housing crisis, Fiorina said McCain believed a lack of transparency and accountability among a series of financial players and regulators had led to the problem and thought government should have a role in helping consumers address it.

"Wall Street, the banks, the regulators, the credit rating agencies, they all have a share in this. Speculators have a share in this as well," she said.

She said that though McCain was opposed to overregulation, he did recognize that an insufficient amount of oversight of credit ratings agencies to be a problem.

"He would support more government oversight and more consistency of standards, as to ... what is it that credit ratings agencies should be looking for," Fiorina said.

Fiorina said McCain had a lot of confidence in Bernanke but declined to predict whether the Arizona senator would reappoint him for another term.

"That'll be his decision," she said. "He has a lot of confidence in Bernanke."

Fiorina said McCain would likely leave in place the 15 percent rate on carrier interest income for private equity partners.

"I think it's fair to say that he would probably leave it as is," she said, adding that the fortunes of private equity firms had fallen dramatically as they got tangled up in the U.S. housing crisis.

(Editing by Philip Barbara, Patricia Wilson and Frances Kerry)