Bankers on Fed Boards: Is Good News for the Banks Bad News for the Fed?

48 Pages Posted: 30 Nov 2013

Date Written: November 25, 2013

Abstract

Bankers and non-bankers sit on Federal Reserve Bank Boards. In the case of banks, this may create a perception problem since the Fed supervises banks. I examine who sits on Reserve Bank boards and the market reaction to director appointments during the period 1990-2009. I document that Fed directors from the banking industry typically work for large banks. Furthermore, the average market reaction to the appointment of a firm’s officer to a Reserve Bank board is positive only for banks. My results are consistent with the idea that the Fed’s governance structure may continue to expose it to reputation risk.

Keywords: Federal Reserve, Director, Banks, Conflicts of Interest, Reputation, Perception

JEL Classification: E58, G28, G30

Suggested Citation

Adams, Renée B., Bankers on Fed Boards: Is Good News for the Banks Bad News for the Fed? (November 25, 2013). Available at SSRN: https://ssrn.com/abstract=2361190 or http://dx.doi.org/10.2139/ssrn.2361190

Renée B. Adams (Contact Author)

University of Oxford ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
176
Abstract Views
1,671
Rank
307,910
PlumX Metrics