WASHINGTON - Two nominees to fill spots on the Federal Reserve Board pledged Thursday to support the dual mandate of price stability and full employment while working towards supporting the economic recovery.
In statements prepared for delivery to the Senate Banking Committee, Sarah Bloom Raskin and Peter Diamond each stressed the role the Fed will play in ensuring continued growth, improved employment prospects and a recovery in business lending.
"This is a challenging moment for the Federal Reserve," Bloom Raskin said, noting that "even though the worst of the crisis is over, it remains a precarious time for far too many of our families and businesses. The Fed must do its part to restore the underlying strength and vibrancy of the American economy."
Bloom Raskin, who served as Maryland's Commissioner for Financial Regulation over the last four years, said the Fed's success in achieving price stability "is critical to our economic strength, and it remains a central institutional objective that I subscribe to wholeheartedly."
But she said high unemployment has "pervasive social costs" that also must be addressed.
"The Fed must work for a broad and sustained recovery that not only controls inflation but facilitates growth and more robust business lending by banks," she said.
Diamond, an economics professor at the Massachusetts Institute of Technology since 1966, said, "The experience of the recent financial crisis and the financial reform legislation have underlined the multiple jobs the Fed has in working to fulfill the dual mandate of high employment and price stability. The Fed will have major work to do to implement the tasks that the legislation is placing at the Fed."
He noted that his specialty has been the study of how the economy deals with risks, which "should be very helpful at the Federal Reserve as part of the process of addressing our heightened awareness of the dangers of systemic risks."
San Francisco Federal Reserve Bank President Janet Yellen also testified at the hearing on her nomination to serve as Fed vice chair.
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