Blacks & the Federal Reserve: Does the Board's Lack of Diversity Affect Your Pocketbook?
McCoy, Frank, Black Enterprise
Whether you know it or not, the Federal Reserve System (the Fed) in washington, D.C., which regulates the U.S. banking and monetary system, affects your daily financial life. That is, unless you don't have a bank account or a charge card, and you never buy on credit. But if you do, your decisions are affected by changes in short-term interest rates. And since two-thirds of the U.S. gross domestic product is consumer-derived, interest rate changes have a major impact on economic growth.
That's where the Fed comes in, albeit indirectly. When your bank borrows money from the Fed, it lends money to you at a slightly higher interest rate. The Federal Reserve Board of Governors (FRB) Chairman Alan Greenspan announces the rate changes after he and his six fellow governors--all presidential appointees--approve them.
Since the Fed's creation in 1913, there have been 74 FRB appointees. However, only two minority men (both black) and four women (all white) are on this roster. The two African-Americans to serve on the FRB, Andrew F. Brimmer and Emmett J. Rice, are both members of the BLACK ENTERPRISE Board of Economists (BEBE).
The dissimilarity between those controlling monetary policy and the nation's population causes some people to ask if racial and gender considerations should be part of FRB nominations. The president's nomination guidelines are broad. He or she is directed to select a "fair representation of the financial, agricultural, industrial and commercial interests and geographical divisions of the country. …