Greenspan at 87 is nominated for new four-year term

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The Independent Online

With the US economy apparently embarked on a solid recovery, President George Bush yesterday re-nominated Alan Greenspan to serve a fifth four-year term as chairman of the Federal Reserve.

With the US economy apparently embarked on a solid recovery, President George Bush yesterday re-nominated Alan Greenspan to serve a fifth four-year term as chairman of the Federal Reserve.

"Alan Greenspan has done a superb job," Mr Bush said in a brief statement read by the White House spokesman Scott McClellan, a little over a month before the Fed chairman's current term expires on 20 June.

In fact the 78-year-old Mr Greenspan is unlikely to serve beyond February 2006, when he completes the maximum 14 year tenure of a Federal Reserve governor. He has been in charge of the US central bank since 1987, but his first five years were counted as part of the uncompleted term of his predecessor, Paul Volcker.

Should he continue through to February 2006, Mr Greenspan will almost match the record 19-year stint of William McChesney Martin, at the Fed's helm from 1951 to 1970.

While there have been hints of White House displeasure at the near-certainty that the Fed will raise interest rates this summer ­ just as Mr Bush's re-election campaign moves into a critical phase ­ there was no doubt whatsoever that Mr Bush would ask Mr Greenspan to stay on.

Mr Greenspan has given no sign that he has ceased to enjoy what is considered the second most powerful job in the US ­ some would say in the world. And even if Mr Bush had been minded to replace him, the departure of a man credited with almost supernatural powers might have sent an earthquake through already edgy financial markets.

By common consent, Mr Greenspan has been one of the most successful Fed chairmen in history. He weathered a baptism of fire in the October 1987 "Black Monday" Wall Street crash, and steered the economy through the upswing of the 1990s.

Thereafter he is credited with ensuring that the 2000-01 recession was a relatively modest affair. His prompt lowering of interest rates to their current 45-year lows helped blunt the economic impact of the September 11 terrorist attacks. Under Mr Greenspan, the Fed also helped the international financial system weather the 1997-98 Asian market turmoil.

The re-nomination will suit whoever wins the White House in November. Either Mr Bush or his Democratic challenger John Kerry will have at least a year to decide on a successor ­ although it is technically possible for Mr Greenspan to stay in office for a few months after that.

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