(The Bloomberg View) — President Trump’s planned nomination of Nellie Liang to the Federal Reserve’s Board of Governors, which oversees everything from interest-rate policy to financial stability, is a little surprising. She’s admirably well-qualified and in every way a good choice.
Trump hasn’t always shown such good judgment. Some of the officials he’s appointed elsewhere are even at odds with the missions of the agencies they’re supposed to run. That certainly can’t be said of Liang, a longtime Fed staffer currently at the Brookings Institution, who boasts a distinguished record and excellent practical and theoretical knowledge.
In the darkest days of the last financial crisis, she helped run a round of bank stress tests that proved instrumental in restoring confidence. She then led a systemic-risk monitoring effort, known as the Office of Financial Stability Policy and Research, that has become one of the Fed’s most important departments.
Sadly, Liang isn’t known as a crusader for the higher capital requirements still needed to ensure the financial system’s resilience, but she could prove to be an important voice against rolling back the protections that have been put in place. She has spoken out in favor of tougher stress tests, and her joint research with economists at the International Monetary Fund has demonstrated how loose financial conditions can make economic disasters more likely.
To be fair to the president, this isn’t the first good appointment he’s made to the Fed. After Chair Janet Yellen — unfortunately — stepped down last year, Trump replaced her with Jerome Powell, a seasoned board member who shared many of her views. Other choices include Richard Clarida, a monetary-policy and international finance expert who served in the administrations of both Ronald Reagan and George W. Bush.
If the Fed has a special dispensation in the matter of appointments, one shouldn’t complain. It’s hard to overstate the importance of continuity and professionalism at the central bank. Liang provides more of both. She’ll be the first Asian-American and only the tenth woman to serve on the board. The president even managed to overlook the fact that she’s a Democrat. The Senate should act quickly to confirm her in the job, before the president has second thoughts.
—Editors: Mark Whitehouse, Clive Crook
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