12.04.2017

NEW YORK-- “The Fed Up coalition is deeply disappointed that the board of directors at the Richmond Federal Reserve Bank failed to select a diverse candidate with demonstrated independence from the financial sector. In choosing Thomas Barkin to lead the Richmond Federal Reserve, the Richmond Fed’s board ignored the voices of our coalition, over 14,000 petition signers, numerous congressional representatives, and local elected officials from the fifth Federal Reserve district who had urged a transparent, publicly inclusive process resulting in the selection of a candidate who reflects the Richmond region's racial and economic diversity.

The Richmond Fed has never had a woman or person of color serve as its president. Rather than selecting one of many qualified economists, scholars, and non-profit professionals from diverse backgrounds around the country, the Richmond Fed continued the trend of elevating a white man from the financial sector. Despite the fact that Barkin’s predecessor, Jeffrey Lacker, resigned after admitting to leaking market-sensitive information to a hedge fund, the Richmond Fed’s board chose a financial industry adviser who is likely to prioritize the investor class’ interests over working people’s interests. A growing body of research shows that market concentration is a significant contributor to economic inequality. The Richmond Fed board could have chosen someone with expertise on how corporate consolidation is affecting the labor market for workers; instead, it appears to have chosen a Fed insider with a history of making major airlines and financial services firms even bigger.

Lacker’s resignation underscored the need for more diversity and more independence from Wall Street at the Fed. Donald Trump is busy making the Fed less diverse by filling the Board of Governors with white, male former Wall Street executives who promise to roll back financial protections and cut off job growth just as it is reaching communities of color. Now more than ever, it is paramount that the regional Reserve Banks serve their intended purpose of balancing the DC-based Board of Governors’ views with publicly representative officials who understand their regional economies.

We continue to believe that the Federal Reserve should be a fully public institution, and future Reserve Bank presidents should be chosen through a transparent and publicly inclusive process. By failing to enact such a process, the Richmond Fed reinforced the impression that Federal Reserve officials are chosen behind closed doors by people with nearly identical backgrounds. Rep. Maxine Waters and several members of Congress wrote twice to the Richmond Fed board to stress the importance of a transparent process resulting in the consideration of diverse candidates. In February, Richmond Fed Chair Margaret Lewis responded to emphasize her commitment to considering diverse candidates. Despite these assurances, the selection process dragged on for months without any updates or information, falling short of the standard for transparency set by the Atlanta Fed board's search process earlier this year, when Raphael Bostic was named the first African American Reserve Bank president in the Fed's history

As we look toward the upcoming process for selecting New York Fed President Bill Dudley’s replacement, we urge the New York Fed board to adopt a publicly inclusive process that considers candidates from a diverse array of backgrounds.”

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www.thepeoplesfed.org

Fed Up is a coalition of community organizations, labor unions, and policy experts across the country calling on the Federal Reserve to reform its governance and adopt policies that build a strong economy for the American public. By keeping interest rates low and prioritizing genuine full employment, the Fed gives the economy a fair chance to recover and allows wages to grow across all communities.

Contact: Shawn Sebastian, (515) 451-8773, ssebastian@populardemocracy.org