NEW YORK – Bankers should have a role as directors on the Federal Reserve Bank boards since they provide valuable input and play no role in supervision or regulation, Federal Reserve Bank of Kansas City President and Chief Executive Officer Esther George said in a statement Thursday.
Bankers “provide oversight and guidance” and “grass-roots economic information” that Fed bank presidents need in determining monetary policy, she said.
Bankers are only allowed three of the nine board spots at each Bank. “Along with the six other directors, the three bankers provide critical, in-depth information about economic conditions in their communities,” the statement said.
“While all directors are involved in matters regarding Reserve Bank governance and oversight, they play no part in the Fed’s role in supervising and regulating financial institutions,” the statement stressed. “Decisions and information about supervisory actions are discussed directly between the staffs of the Board of Governors and the Reserve Banks. Directors do not receive this information and do not have any influence over these decisions.”