Economist Stanley Fischer opened his confirmation hearing Thursday to become vice chairman of the Federal Reserve by advocating for the central bank to pay close attention to financial stability, The Washington Post reported yesterday. The Fed has long had a congressional mandate to foster maximum employment and guard against inflation, but after the financial crisis, lawmakers and economists alike felt that the Fed should broaden its scope. Lawmakers peppered Fischer, along with two other Fed nominees — former Treasury official Lael Brainard and renominated Fed governor Jerome Powell — with questions on the effectiveness of reforms to the banking system since the crisis and whether the Fed will be able to unwind its massive stimulus efforts without disrupting the markets. There is broad agreement that the Fed, in conjunction with other regulatory agencies, bears responsibility for preventing dramatic economic swings. Fischer, who until last summer ran the Bank of Israel, acknowledged that volatility could increase as the Fed scales back the amount of money that it is pumping into the economy and moves closer to raising short-term interest rates.
