Former State Treasurer Phil Angelides, the Sacramentan who led the official government inquiry into the 2008 financial market crash, on Monday endorsed fellow Californian Janet Yellen to become the next chair of the Federal Reserve Board.
Angelides, a Sacramento developer and one-time Democratic nominee for governor, issued a statement calling Yellen someone with a fresh perspective, not someone from the Wall Street-Washington axis. He also described Yellen as someone who will be resolute in the oversight of the big banks in the face of their no-holds-barred, rear-guard action to scuttle reform.
Yellen, the current vice chair of the Fed, is reportedly vying with former Treasury Secretary Lawrence Summers to become President Barack Obamas nominee to replace Ben Bernanke as Fed chair.
In an interview, Angelides said he prefers Yellen over Summers because it would be good to have someone who was not part of the deregulatory movement. As Treasury secretary in the Clinton administration, Summers championed the principle of giving banks greater leeway in lending, derivative investments and other fields.
Angelides chaired the Financial Crisis Inquiry Commission, appointed by Congress to get to the bottom of the market crash. The commissions report, released in early 2011, concluded that the crisis was rooted largely in a deregulatory climate that ignored mortgage-lending abuses and other problems.
The Federal Reserve controls the nations money supply but also has enormous regulatory power over banks behavior, Angelides said. You want a tough overseer of the banks, he said.
Yellen, a business professor at UC Berkeley, was president of the San Francisco Federal Reserve Bank from 2004 to 2010. Angelides said transcripts of Fed meetings show that Yellen was among those officials warning that loose lending practices in the housing market were leading the economy into danger.
He added that Yellen also is known as a champion of using monetary policy to grow the economy, not just clamp down on inflation.
Call The Bees Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.