Bloomberg News

Summers Shunned for Fed by Almost 50% in Survey

November 30, 2012

Summers Shunned as Fed Chairman by Almost 50% in Global Poll

Lawrence "Larry" Summers in Washington. Photographer: Andrew Harrer/Bloomberg

Almost half of global investors say President Barack Obama shouldn’t select former Treasury Secretary Lawrence Summers as the next chairman of Federal Reserve Board, according to the latest Bloomberg Global Poll of investors.

Only 17 percent of the 862 surveyed say it would be a good idea to appoint Summers, 57, to replace current Fed Chairman Ben S. Bernanke, 58, whose term expires in January 2014. Thirty-four percent didn’t have an opinion and 49 percent said it was a bad idea.

The Nov. 27 poll of Bloomberg customers who are investors, traders or analysts was conducted by Selzer & Co., a Des Moines, Iowa-based company. It has a margin of error of plus or minus 3.3 percentage points.

“Although Lawrence Summers is an exceptionally talented man, the Fed chair is in need of a man with less connections and entanglements to the establishment,” Fredrik Fyring, a derivatives trader at Skandinaviska Enskilda Banken in Stockholm, said in an e-mail. The recent choice of Mark Carney to head the Bank of England shows that an “outsider to the current establishment can be a good choice,” he said.

Bernanke said at a Sept. 13 press conference that he doesn’t “have any decision or any information to give” on his personal plans after his term runs out, and former colleagues say he’s unlikely to stay on.

Passed Over

When Obama reappointed Bernanke in the summer of 2009 to a second four-year term, he passed over Summers, who was then serving as director of the National Economic Council, according to two people familiar with the matter. Earlier this year, Obama considered Summers as a candidate to become president of the World Bank, a position that ultimately went to Jim Yong Kim, then the president of Dartmouth College, said the people familiar with the president’s deliberations.

The Bloomberg poll showed that investors have mixed views on whether Obama should elevate Janet Yellen, the Fed’s vice- chairman, to head the central bank. Thirty percent of respondents say Yellen would be a good choice as chairman, 32 percent say it would be a bad idea and 38 percent say they’ve no opinion.

Yellen, 66, has joined three other Fed officials in support of a policy to tie zero interest rates with progress on fighting unemployment as a way to provide more clarity on the central bank’s outlook for monetary policy.

Return to Harvard

After leaving government in late 2010, Summers returned to Harvard University, where he was president from 2001 to 2006, to teach at the John F. Kennedy School of Government.

Summers didn’t respond to an e-mailed request for comment.

Last month, when asked if he would like to become chairman of the Fed, he demurred.

“I have served my time, been privileged to be in two administrations,” he said Oct. 26 on CNBC. “Right now, my focus is on trying to think through some of the longer-term challenges.”

To contact the reporter on this story: Hans Nichols in Washington at hnichols2@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net


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