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.
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
- 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
- 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.
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.