William Keegan
There is speculation in international financial circles that Alan Greenspan may be offered a fourth term as chair of the United States Federal Reserve.
Greenspan (73) was appointed by president Ronald Reagan in 1987, and subsequently reappointed by presidents George Bush and Bill Clinton.
His third term expires in June 2000, but 2000 will also see a presidential election. Under the US Constitution Clinton cannot stand for a third term, and the new Fed chair would be serving Clinton’s successor for most of his tenure. But there is growing speculation that US Treasury Secretary Robert Rubin will return to private life this summer, and that Clinton would like Greenspan’s support to appoint Deputy Treasury Secretary Lawrence Summers as Rubin’s successor.
Summers is a brilliant but controversial figure, and thought to lack some of Rubin’s diplomatic skills. If Greenspan were to lend Summers his support, the theory is that a grateful President would offer to reappoint Greenspan for a further term.
Greenspan is so respected in financial markets that his reappointment would be extremely well received. One central banker said: “It’s all a bit scary. There’s a sense almost that the personal reputation of Greenspan is making a material contribution to the feeling in the US that nothing can go wrong with the economy. At this juncture, they cannot afford the loss of confidence that Greenspan’s retirement would mean.”