Sheila Bair, a former chairwoman of the Federal Deposit Insurance Corporation, has endorsed Janet Yellen to replace Ben Bernanke as chair of the Federal Reserve.
Bair stated in an op-ed for CNN that was published Tuesday that Yellen is “clearly the most qualified person” for the top job at the U.S. central bank and can break the "glass ceiling" for women in the country's top financial positions.
“Certainly, there is no better-qualified candidate to fill Bernanke's shoes when he steps down in January. A noted economist, Yellen headed the Council of Economic Advisors for two years, led the San Francisco Federal Reserve Bank for six years, and has served ably as Bernanke's vice chairman since 2010,” wrote Bair.
“Unlike Larry Summers, Tim Geithner and other Bob Rubin minions frequently mentioned in the financial press as potential Bernanke successors, she was not part of the deregulatory cabal that got us into the 2008 financial crisis," Bair continued. "In fact, she had a solid record as a bank regulator at the San Francisco Fed and was one of the few in the Fed system to sound the alarm on the risks of subprime mortgages in 2007.”
However, Bair admits she doesn’t share Yellen’s endorsement of the Fed’s unprecedented bond-buying and zero interest rate policies that, she says, “have punished savers, created new sources of financial instability, worsened income inequality, and allowed our elected officials to feast on cheap debt while shirking their responsibility to develop coherent fiscal policies.”
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But what might prevent Yellen from establishing herself in this position, says Bair, is not just a so-called whispering campaign -- with her mostly anonymous critics saying she "doesn't understand the markets," is "not assertive enough" and "lacks gravitas" -- but that history is stacked against her. No Federal Reserve chairman has ever been selected from the vice chair position, which Yellen currently holds.