Neil Sinhababu notes that one of the less-heralded provisions of the Dodd-Frank financial regulation overhaul is a modest improvement in the scandalous governance structure of the Federal Reserve system. Specifically, this:
Election of Federal Reserve Bank Presidents: Presidents of the Federal Reserve Banks will be elected by class B directors — elected by district member banks to represent the public — and class C directors — appointed by the Board of Governors to represent the public. Class A directors — elected by member banks to represent member banks — will no longer vote for presidents of the Federal Reserve Banks.
That said, the idea that Class B director “represent the public” although they’re actually chosen by the banks strikes me as a bit of an obvious fraud. Still, this is a step in the right direction. But this is all part of the reason why it’s so bad for the President to let Board of Governors vacancies linger. The longer those slots are open, the more influence the regional presidents — guys who are basically representatives of local creditor interests — have over a crucial area of national policy.