WASHINGTON -- A coalition of 60 national and local religious organizations sent a letter to President Barack Obama on Wednesday urging him to appoint a Federal Reserve chair who has "a strong and proven track record as a staunch supporter of the role of regulation in limiting excessive risk-taking by financial institutions."
The letter seems to be a veiled critique of former Obama economic adviser Larry Summers, who was a champion of deregulation during the Clinton years, and who opposed some of the stronger new standards established by the 2010 Dodd-Frank Wall Street reform law. Summers and current Fed Vice Chair Janet Yellen are viewed as the top candidates for the position, but the Obama administration indicated recently that the president strongly favors Summers.
The letter was organized by Jubilee USA Network, a team of hundreds of nonpartisan religious groups devoted to economic policies that protect vulnerable people and communities.
In addition to urging Obama to nominate a strong regulator, the groups asked Obama to name a Fed chair who will commit to reestablishing the separation between commercial banking and securities trading, known as Glass-Steagall -- an unlikely prospect regardless of whom Obama nominates.
They also highlighted the importance of protecting the global poor from food price shocks through financial regulation. Many economists have concluded that excessive speculation in the derivatives market exacerbates swings in the price of commodities.
"The impact of financial deregulation on food price volatility is a major concern to us," the letter reads. "Congress took some positive steps to increase the transparency of [food and commodities] markets and to limit excessive speculation under the Dodd-Frank Wall Street Reform and Consumer Protection Act. But these essential reforms have yet to be fully implemented."
The letter comes as a broad coalition of progressive political groups organizes to oppose a Summers nomination, citing his record of deregulatory judgments, derisive statements about women and his difficulty working with women in the Obama administration. In July, more than half of all House Democratic women signed a letter to Obama urging him to nominate Yellen to chair the Fed, as did dozens of Democratic senators and the National Organization for Women.
Read the full Jubilee USA Network letter here.