In a shocking announcement, the latest rat to abandon the sinking ship – because it is far less fun to navigate the world’s biggest economy when you are raising rates than when injecting trillions – Federal Reserve Vice Chairman Stanley Fischer has announces his decision to step down effective October 13 (Friday), citing “personal reasons” in letter of resignation to President Donald Trump. His term as vice chair was set to expire on June 12, 2018
In the letter, Fischer praises America’s economic growth during his tenure, and says that “informed by the lessons of the recent financial crisis, we have built upon earlier steps to make the financial system stronger and more resilient and better able to provide the credit so vital to the prosperity” of the US.
In one of his last public appearances, Fischer warned about complacency over market risks, and said that the price of “risky assets,” had increased in most major asset markets in recent months, including equities, which now stand in the top quintile of historical distributions.
“the increase in prices of risky assets in most asset markets over the past six months points to a notable uptick in risk appetites…. Measures of earnings strength, such as the return on assets, continue to approach pre-crisis levels at most banks, although with interest rates being so low, the return on assets might be expected to have declined relative to their pre-crisis levels–and that fact is also a cause for concern.”
Complimenting Fischer, in the Fed’s statement Janet Yellen said that “Stan’s keen insights, grounded in a lifetime of exemplary scholarship and public service, contributed invaluably to our monetary policy deliberations. He represented the Board internationally with distinction and led our efforts to foster financial stability.”
Full Fed statement below:
Stanley Fischer submits resignation as a member of the Board of Governors, effective on or around October 13, 2017
Stanley Fischer submitted his resignation Wednesday as Vice Chairman and as a member of the Board of Governors of the Federal Reserve System, effective on or around October 13, 2017. He has been a member of the Board since May 28, 2014.
“Stan’s keen insights, grounded in a lifetime of exemplary scholarship and public service, contributed invaluably to our monetary policy deliberations. He represented the Board internationally with distinction and led our efforts to foster financial stability,” said Chair Janet L. Yellen. “I’m personally grateful for his friendship and his service. We will miss his wise counsel, good humor, and dry wit.”
Dr. Fischer, 73, was appointed to the Board by President Obama for an unexpired term ending January 31, 2020. His term as Vice Chairman expires on June 12, 2018. During his time on the Board, he served as chairman of the Board’s Committee on Financial Stability as well as the Committee on Economic and Financial Monitoring and Research. He represented the Board internationally including at the Financial Stability Board, the Bank for International Settlements, the Group of 20, the Group of Seven, the International Monetary Fund, and the Organisation for Economic Co-operation and Development.
Before joining the Board, Dr. Fischer was governor of the Bank of Israel, from 2005 to 2013. He was vice chairman of Citigroup from February 2002 to April 2005. He served as first deputy managing director of the International Monetary Fund from September 1994 through August 2001. From January 1988 to August 1990, he was the chief economist of the World Bank. He was a professor of economics at the Massachusetts Institute of Technology from 1977 to 1999 and associate professor from 1973 to 1977. Prior to joining the faculty at MIT, he was an assistant professor of economics and postdoctoral fellow at the University of Chicago.
Dr. Fischer was born in Lusaka, Zambia, in October 1943. He received his B.Sc. and M.Sc. in economics from the London School of Economics. He received his Ph.D. in economics from the Massachusetts Institute of Technology in 1969.
Dr. Fischer is married with three adult children.
A full copy of his letter to president Trump, in which he underscored the Fed’s role in
strengthening the US economy and financial system, is below:
Is Yellen next?
via http://ift.tt/2wHTxQ7 Tyler Durden