Walker Dean Outlines Criteria for New Federal Reserve Chair

Dean AkandeThe selection of the next Federal Reserve Chairman will be the biggest economic decision made by President Obama during his presidency. While two candidates have emerged as front-runners to replace current chair Ben Bernanke, Benjamin Akande, economics professor and dean of the Walker School of Business and Technology, outlined five skill sets needed by the next chair.

“The most important responsibility of the Federal Reserve Chair is to protect the value of our nation's money,” said Akande. “If we are to ensure our financial health, then the President must select a candidate who understands this, has the courage to act, and has the management, leadership and communication skills expected of America's next central banker.”  

Five Musts of the Next Fed Chair – by Benjamin Akande, Ph.D.

America is at a cross-road with inflation, high unemployment and weak regulations on banks and credit. In order to address these challenges, it is imperative that the President select a Federal Reserve Chair who faces them head-on. 

Courage to Act: Addressing tough regulations on banks and credit needs to be the new chair's first priority. Economic stability will be derived from this, and stability is essential to our financial system. We need a chair that is a brave, but not a gambler. The chair must respect risk but not be risk adverse.

Good Manager:  The Federal Reserve Chair is expected to react first in a foreign or domestic financial crisis. Thus, the next chair must have the capacity to see around the corner and have the audacity to act. The chair must not be wary of crisis because conflicts will arise on a regular basis. The chair must be prepared to work diligently to resolve crises.

Dynamic leader:  One of the chair's primary responsibilities is overseeing the Federal Open Market Committee and the Fed. In order to ensure these teams function effectively, the Fed needs a leader who is resourceful and adaptable, and has the ability to influence, motivate and empower others. These are CEO-like qualities which cannot be learned on the job.

Communicator Extraordinaire:  The Federal Reserve Chair must keep congress and the public informed of the state of the Federal Reserve. As such, it is important that the next chair understands how to adapt a message to the audience and deliver it with confidence and credibility. 

A Professor and Student of the Economy:  There is a clear distinction between a student and a professor. A student is always learning, challenging assumptions. A professor is in pursuit of new ways of doing old things, experimenting and always pushing the envelope. It will be advantageous to America's financial health if the next chair is both a student and a professor of the economy.

If President Obama takes these five criteria into account when selecting Ben Bernanke's replacement, then I am confident the next Federal Reserve Chair will be an appropriate candidate for the most important economic job in the world.