| WASHINGTON, June 7
WASHINGTON, June 7 In the summer of 2009, with
the U.S. economy badly wounded and the nation's financial
calamity still a vivid memory, President Barack Obama's closest
aides began a vital discussion about who he should nominate to
run the Federal Reserve.
It was, according several former insiders, a short
conversation. Fed Chairman Ben Bernanke was battling resolutely
to restore growth, hiring and financial stability, and little
serious consideration was given to an alternative.
Furthermore, Obama's most trusted adviser on financial
matters, Treasury Secretary Timothy Geithner, who had formerly
led the New York Fed, had a deep relationship with Bernanke and
was a strong advocate for not changing horses in mid-stream.
Four years later, continuity will again be a big factor as
the White House begins to think about who should succeed
Bernanke if, as widely expected, he steps down when his second
term as chairman expires at the end of January.
The stakes are huge. The U.S. recovery remains fragile, and
financial markets are anxious about how long the Fed intends to
continue its massive and unconventional stimulus: $85 billion a
month of bond purchases that have helped propel stock markets to
record highs and driven interest rates to historic lows.
Bernanke has said nothing publicly about his plans. But the
former Princeton professor has not torpedoed the notion he does
not want a third term, a view that gained traction with his plan
to skip the Fed's big annual economic summit in Jackson Hole,
Wyoming, in August, the first Fed chair to miss it in 25 years.
The White House has also declined to comment on the Fed
choice, widely expected by September. Were Obama to look beyond
Bernanke, he could weigh several criteria: policy continuity and
market credibility; Senate confirmability; crisis management
credentials; and trust.