Appointment of Dr Donald Kohn to the interim Financial Policy Committee - Treasury Contents


2  Dr Donald Kohn

Background on Dr Donald Kohn

10.  Alongside his appointment to the interim FPC, Dr Kohn will maintain a number of other appointments. He is a member of the Congressional Budget Office, sitting on their Panel of Economic Advisors and will retain this position while being an external member of the FPC. He was appointed a Senior Fellow of the Economic Studies Program at the Brookings Institution and will soon be a member of the Board of Trustees of the College of Wooster. He will continue both of these roles alongside his appointment on the FPC. He will also retain his position as a member of two advisory committees at the IMF Monetary and Capital Markets Department, the Macroprudential Policy Committee and the Money and Exchange Rate Policies Committee. Dr Kohn sits on the Board of Directors of Alliance Partners, an asset management and services firm and will shortly be the Senior Economic Strategist for Potomac Research Group. He will remain in both of these roles alongside his appointment on the FPC. Dr Kohn has past experience of Central Banking, having been on the Federal Reserve System Board of Governors since 2002 (holding the vice-chair from 2006 to 2010). Dr Kohn received his doctorate from the University of Michigan in Economics in 1971.

Our evidence

11.  In oral evidence, we questioned Dr Kohn about his personal suitability for the post, the issues facing the new interim FPC, and how he saw himself responding to those issues. The topics we questioned Dr Kohn about included:

  • The decisions made during his time at the Federal Reserve and the lessons he drew from the financial crisis;
  • His thoughts on the Volker rule;
  • Potential conflicts with his other commitments;
  • The time he expects to spend in London;
  • The payment model for credit ratings agencies;
  • The problem of financial institutions that are "too important to fail";
  • Whether non-banking parts of the financial system require scrutiny;
  • Priorities for, and issues around, the development of the FPC's tools;
  • Circumvention of the FPC's tools;
  • Maintaining the FPC's vigilance during periods of economic stability;
  • The definition and measurement of financial stability;
  • The difficulties around using and explaining the FPC's tools; and
  • The objectives of the FPC.

Conclusions

12.  We were particularly keen to hear why a former US regulator would be suitable for appointment to the interim FPC. We were impressed by Dr Kohn's frankness and rigour regarding the lessons he had learnt from the financial crisis and believe that this may enable him to make a particularly valuable contribution in the role.

13.  We were pleased to note that Dr Kohn will prioritise the FPC above all his other commitments.

14.  We are satisfied that Dr Donald Kohn has the professional competence and personal independence to be an external member of the interim Financial Policy Committee. We wish him every success in his new role.



 
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© Parliamentary copyright 2011
Prepared 23 May 2011