Donald Kohn Comments Send Him To The Back Of The Line For Next Fed Chairmanship

Posted By on September 16, 2013

Wise Dog Sources believe that Kohn is NOT a deregulator as Summers was perceived to be, and his comments that we review below essentially take him out of the Federal Reserve Chairman job opening!

Wikepedia: Donald Lewis Kohn (born November 7, 1942) is an American economist who served as the former Vice Chairman of the Board of Governors of the Federal Reserve System. He is considered a moderate dove on monetary policy. He retired after 40 years at the central bank in September, 2010.

So here we go…..Donald Kohn drops the following headline bomb-shells at a Brookings’ event this morning:

 

  • KOHN: BAIL-IN NEEDED TO PROTECT FINANCIAL SYSTEM FROM TOO BIG TO FAIL FIRMS
  • KOHN: VERY EASY MONETARY POLICY CAN CREATE DANGEROUS RISKS
  • More Headlines (via Reuters):

    • KOHN: GREATER FINANCIAL TRANSPARENCY NEEDED TO ENSURE STABILITY
    • KOHN COMMENTS ON PRINCIPLES OF PROTECTING FINANCIAL SYSTEMS IN GENERAL
    • KOHN: US IN EXPERIMENTAL STAGE OF REGULATING FINANCIAL RISKS
    • KOHN: US REVIEWING INDICATORS OF FINANCIAL RISKS FOR POTENTIAL DEEPER DIVES
    • KOHN: DON’T EXPECT TOO MUCH FROM FINANCIAL SYSTEM OVERSIGHT
    • KOHN: FINANCIAL OVERSIGHT WON’T PREVENT MAJOR CRISES, RATHER BUILD SYSTEM RESILIENCE

    Ian Talley at the Wall Street Journal …..notes some other – ‘less-than-uber-dovish’-comments:

    Very easy monetary policy often builds imbalances that may become so large that can’t be countered by regulation,”

    Problems can arise when one policy [monetary or financial regulation] is leaning so hard in one direction, the other can’t compensate, can’t achieve its objectives. And in these extreme kinds of circumstances, each policy may need to pay more attention to the objectives of the other’s.”

    “We can see in the United Kingdom, in my role on the financial policy committee in the U.K., how useful it is to have an autonomous group, an autonomous voice, that can say to the monetary authorities, or the governmental authorities, you’re pushing so far in this direction, we’ve used our regulatory tools, but we think you are creating instabilities.”

    The Sources Used In This Article Are Thought To Be Reliable: Wise Dog, and www.zerohedge.com

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