WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner said on Thursday that changes were needed in the way regional Federal Reserve banks’ boards are set up to avoid any hint that Wall Street might have undue influence on them.
Geithner was asked during an interview on “PBS Newshour” about criticisms of having the chairman of JPMorgan Chase, Jamie Dimon, sitting on the board of the New York Fed, which regulates his bank, when a $2 billion trading loss is under investigation.
Geithner, who headed the New York Fed before becoming Treasury secretary, noted that board members do not write the rules that it imposes.
“Their role is a much more limited role, and the role is to help provide a perspective on what’s happening in the economy as a whole,” he said, while conceding that might not be well understood and could be misconstrued by some.
“I agree with you that the, that perception is a problem. And it’s worth trying to figure out how to fix that,” Geithner said.
Elizabeth Warren, who helped set up the Consumer Financial Protection Bureau for the Obama administration and now is running as a Democrat for a Senate seat in Massachusetts, was among those calling for Dimon to resign from the New York Fed board.
Dimon is one of three bankers sitting on the New York fed board. Each of the 12 Fed regional banks has a nine-member board, with three seats going to bankers and the other six to representatives of borrowers.
Reporting by Glenn Somerville; Editing by Leslie Adler