By Matthew Russell Lee
UNITED NATIONS, July 2 -- When the International Monetary Fund's Christine Lagarde introduced Federal Reserve chair Janet Yellen to give the first Michel Camdessus Central Banking Lecture on July 2, she did not repeated whatshe said only two weeks earlier, that the Fed should communicate more frequently.
In laying out lessons learned from the subprime financial meltdown of 2008, Lagarde did not question the role of the Federal Reserve in failing to take action on the predatory lending by the Big Four banks, or the pooling and pitching by investment banks of predatory mortgages by Ameriquest, New Century, et al.
So what, really, was learned?
On July 2, Lagarde compared central bankers to mountaineers, and told Yellen, "Janet, you may not be surprised to know that when you give your press conferences a group of passionate staff here at the IMF get together to watch you live on screen. I am told they even bring pop corn to the meetings!"
Back on June 16 the IMF assessment was that
"Enhancing the Fed’s communication toolkit would be a natural evolution that could help temper the likelihood of market volatility along the exit path. This could include scheduling press conferences by the Fed Chair after each FOMC meeting (to provide a more frequent, structured environment to explain the committee’s evolving thinking). It could also involve publishing a quarterly monetary policy report, that is endorsed by the FOMC and which conveys more detail about the majority view of the FOMC on the outlook, policies, and the nature of uncertainties around the baseline. Such a report may also convey dissenting views on the FOMC as well as broader information on how the FOMC thinks about policy reactions in plausible, non-baseline scenarios. Finally, the FOMC could provide greater clarity about how financial stability considerations figure into its monetary policy calculus."
She might have added: the Fed can and should do better under the Freedom of Information Act, on which in full disclosure Inner City Press has litigated with the Fed. Then again, at least the Fed accepts that it is covered by FOIA - the United Nations doesn't (see below).
While the IMF is more frequently taking Press questions online, we note for example that a repeatedly asked question about whether the IMF includes Western Sahara in Morocco's data has been stonewalled, including the days Lagarde was in Rabat.
Lagarde was asked who she favors in the World Cup and said she was "delighted to see French team did as it did." Well, that's some transparency.
The UN also has a position on the US Federal Reserve, it emerged on May 21, at least a position favoring new Fed chair Janet Yellen over her predecessor Ben Bernanke.
Inner City Press asked Pingfan Hong of the UN Department of Economic and Social Affairs about DESA's mid-year update of the UN World Economic Situation and Prospects, which called on the Fed to communicate more clearly as it tapers away from quantitative easing -- does the UN favor an audit of the Fed, and what of the impact on tapering QE on emerging markets? Video here.
Pingfan Hong recounted that an IMFC meeting he attended, Yellen admitted to negative impacts on emerging markets, which he said Bernanke obfuscated by claiming positive impacts too. (Bernanke now is speaking at $250,000 dinners, so criticism from DESA may not concern him.)
Inner City Press also asked Pingfan Hong about the WESP's call for the implementation of IMF quota reform -- was this really related to the IMF's ability to lend to Ukraine, and what are its economic impacts?
Pingfan Hong replied that it is more of a “long term” issue, but that countries should follow through on what they commit to. What about democracy, though? And what about democratizing the Federal Reserve? We'll have more on that. Watch this site.
