Four Questions for the Next Fed Chairman

As President Barack Obama weighs his choice to lead the Federal Reserve, Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) today posed key questions that any potential nominee must address.

The president's pick to replace Ben Bernanke after his term as chairman ends next Jan. 31 must clearly say whether the Fed's top priority is meeting its full-employment mandate, Sanders and Warren said in a column for The Huffington Post.

They said the nominee must detail what would be done to fulfill the Fed's directive from Congress to pursue monetary policies that "promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates." They also said they want the nominee to specify an "acceptable" rate of unemployment and to lay out detailed steps to achieve that goal.

"The U.S. continues to face a major crisis in unemployment. When Wall Street was on the verge of collapse, the Fed acted aggressively and with a fierce sense of urgency to save the financial system," the senators wrote. The next Fed leader must act "with the same sense of urgency to combat the unemployment crisis in America today," they said.

The nominee also must say whether they would use powers of the Fed to break up "too-big-to-fail" banks and other financial institutions so a failure of a single entity would not pose a catastrophic risk to the economy.

The senators wrote that the nominee must answer whether the deregulation of Wall Street and banks significantly contributed to the worst financial crisis since the Great Depression.

And the next Fed leader must say what should be done with more than $2 trillion in excess reserves that financial institutions have parked at the Fed. Sanders and Warren proposed steering those resources into more productive purposes such as helping small- and medium-sized businesses create jobs.

"The next Fed chair will have an opportunity to get our economy back on track and to help rebuild America's middle class," the senators wrote. "But that will require the right temperament and a willingness to take on Wall Street CEOs when necessary. It is critical that the next Fed chair make a genuine, long-term commitment to supporting those who don't have armies of lobbyists and lawyers to advance their interests in Washington - working and middle-class families.

To read the column, click here.