CRAPO STATEMENT ON FED CHAIR NOMINATION

WASHINGTON – U.S. Senator Mike Crapo (R-Idaho), Ranking Member of the Senate Banking, Housing and Urban Affairs Committee, today issued the following statement during a Banking Committee executive session held to consider the nomination of Janet L. Yellen to be Chairman of the Board of Governors of the Federal Reserve System:

 

"Thank you, Mr. Chairman.

 

"The nomination hearing of Vice Chair Yellen was another opportunity to discuss the risks of the Federal Reserve’s prolonged easy money policies. 

 

"Five years ago, the Fed commenced its unprecedented monetary policy, aggressively pursuing quantitative easing and holding interest rates near or at zero percent.  Those policies led to a $4 trillion dollar balance sheet, now totaling almost one-quarter of the U.S. economic output.

 

"These unconventional and untested policies continue unabated as the Fed continues to purchase $85 billion of securities per month.  The long-term costs of these policies are unclear and, frankly, worrisome.  The immediate benefits are questionable and markets have become too reliant on monetary stimulus.

 

"I voted against a second term for Chairman Bernanke due to my concerns with the Fed’s unconventional monetary policy.  I voted against Dr. Yellen in 2010 for the position of Vice Chair for similar reasons. 

 

"Since joining the Board as Vice Chair, Dr. Yellen continues to promote the policies that led me to vote against her initially.  At her nomination hearing, she gave no indication that a prompt return to normalized policy was on the horizon. 

 

"My position remains unchanged and I cannot vote in support of her nomination.

 

"I appreciate Dr. Yellen’s comments about the need to monitor the risks to financial stability that current monetary policy creates.  I also share her stated concerns about the need to avoid “one-size-fits-all” regulations on different kinds of financial institutions, especially ensuring that community banks are subject to “less onerous” supervision and regulation.  If Dr. Yellen is confirmed as Chair, I will work with her in the ongoing task of implementing financial reforms that balance safety and growth.

 

"As I mentioned in my opening statement last week, our Committee will consider several nominations to fill vacancies at the Federal Reserve Board.  I look forward to working with the Chairman and the members of this Committee to consider nominees who bring balanced viewpoints to the Board on the direction of monetary and regulatory policy.