Trump to Nominate Ex-Fed Economist

WASHINGTON (AP) -- President Trump will nominate Nellie Liang, a former Federal Reserve economist who created its first office of financial stability, to the central bank's board of governors, the White House said Wednesday.

In 2010, then-Fed Chairman Ben Bernanke tapped Ms. Liang to form the office to oversee risks in the financial system in the wake of the 2008 crisis. Today, that operation is as large as the Fed's long-dominant division of monetary affairs.

Ms. Liang joined the Fed in 1986 as a research economist and left the central bank in 2017. Since then, she has served as a senior fellow at the Brookings Institution in Washington, D.C., and as a consultant to the International Monetary Fund. Ms. Liang is a registered Democrat.

In early 2009, Ms. Liang helped lead the government's first round of bank stress tests that helped settle market fears about the resilience of the U.S.'s biggest banks.

Last year, she pushed back against criticism that the Fed's exceptionally easy money policies after the financial crisis had harmed the banking sector and made the financial system more fragile.

"The evidence indicates that extraordinary monetary policies have improved financial stability, including the resilience of banks, not undermined it," she said in a speech at the American Enterprise Institute.

Ms. Liang, 60, received her Ph.D. from the University of Maryland and her undergraduate degree in economics from the University of Notre Dame.

Ms. Liang didn't respond to messages seeking comment Wednesday. A Fed spokeswoman declined to comment.

Mr. Trump has nominated five other individuals to the Fed's seven-seat board. Three have been confirmed by the Senate: Chairman Jerome Powell, Vice Chairman Richard Clarida and Randal Quarles, the vice chairman for bank supervision.

The Senate has yet to confirm two other nominees. These are Marvin Goodfriend, an economist at Carnegie Mellon University, and Michelle Bowman, the banking commissioner of Kansas.

With Ms. Liang's nomination, Mr. Trump will have no more board vacancies to fill before 2020 if the Senate confirms all his nominees.

Mr. Trump expressed annoyance this summer with the Fed's recent short-term rate increases. The central bank raised its benchmark rate in June to a range between 1.75% and 2% and is expected to lift it by a quarter-percentage-point at its two-day meeting next week.

Mr. Trump has largely nominated Fed candidates who are considered nonideological and pragmatic policy hands. Messrs. Powell and Quarles served in the Treasury Department under President George H.W. Bush. Messrs. Clarida and Quarles served in the Treasury for President George W. Bush.