© Millan Mulraine
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At this moment there is no indication that Mr. Bernanke will want to be reappointed. However, I believe it would depend on the overall environment. If by the end of this year there is some indication that the market might become concerned about his departure, it will probably make him reconsider his decision.
Who are the potential candidates and who in you view would be the most suitable for this role?
At this point there is a number of candidates, whose names have been considered, and personally I believe that they all are suitable for this position. However, the market seems to think that Janet Yellen is first in line to replace Ben Bernanke, which seems a reasonable assumption. However, in my view, the other candidates like Lawrence Summers or Timothy Geithner, both ex-Treasury secretaries, can compile a potential competition. It is also quite possible that Roger Ferguson and Donald Kohn, the ex-vice chairmen, both have similar chances to become a potential successor.
Beyond those names, there is a number of people that the President will be considering. I think one of the persons that maybe on the radar of the President or the White House may be Jeremy Stein, the Fed Governor. To my mind, Mr. Stein has a really good chances given his academic credentials and a fact that he is fairly close to the president`s economic advisors.
What major challenges the new candidate may face when he or she will take over the position?
I think one of the main challenges would be extricating the Fed from its accommodative monetary policy stance. Therefore, whoever takes that position will have to lead the Fed, which will have immense difficulties in calibrating monetary policy in a way that one does not jeopardize the recovery, but at the same time does not create the environment for another financial market bubble or unnecessary inflation. I think that would be the main challenge that the new person will face.