The term of office for Alan Greenspan, chairman of US Federal Reserve, will expire on January 31 next year, and this has evoked many concerns.

One concern is whether this 79-year-old current chairman will leave his post on time. According to legal stipulations, the current chairman shall not be reappointed after the expiration is his term. But under the circumstance in which the White House cannot nominate a new chairman or the nominee can't obtain the Senate's approval, the term of the current chairman can be extended. If that is the case, it will be possible for Greenspan to surpass W.M Martin to become the Federal Reserve chairman assuming the longest tenure of office. Martin became the US Federal Reserve chairman from 1951 to 1970, with his term extending 18 years, nine months and 29 days.

However, the US Federal Reserve has ruled out this possibility through its statement published on September 9. The statement announced that the schedule for the regular meeting on next year's first monetary policy decision-making (originally set for January 31 and February 1) was to be shortened to one day--January 31, so as to avoid the meeting from striding across the terms of the new and old chairmen. Analysts hold that this predicts that Greenspan will step down on January 31 next year.

The second concern is who will take over Greenspan's post to become the new administrator of US Federal Reserve. Since US Federal Reserve Chairperson is regarded as a figure with real power next only to the President in terms of his or her influence on the American economy, so public opinion holds that looking for a new candidate for the chairperson is one of the major tasks of this year for the Bush administration.

Up till now, public opinion guesses that the most sought-after candidates are Martin Feldstein, Harvard economist, R. Glenn Hubbard economist with Columbia University, Ben S. Bernanke, chairman of President Bush's Council of Economic Advisers, and Lawrence Lindsay, former US Federal Reserve Bank governor. In addition, Donald L. Kohn, member of the Board of Governors of the Federal Reserve, Roger Ferguson, Federal Reserve Board Vice Chairman, John Taylor, economics professor of Stanford University, and Larry Lindsey, former economic advisor to Bush and member of Fed, are also candidates.

The White House has so far kept silence on the question about candidate for the new chairman. But from the September 9 statement of the Federal Reserve it can be seen that the White House has designated a prospective person and this new chairperson will administer US Federal Reserve from February 1. As to what time will be chosen for announcing the nomination to break this suspense, it depends on the directing skill of the White House.

The third concern is that whether the new chairperson can recreate glory of the Greenspan type. Perhaps only time can give an answer to this major question. Although the US economic situation is good as a whole, just as Greenspan has said: It can almost be said with certainty that in the next 18 years, US Federal Reserve may meet with as many challenges as it did in the past 18 years. In the face of hidden shoals and dangerous reefs and frightful billows and terrible waves, the new chairperson continuing the scientific and artistic artifices in applying Greenspan's monetary policy should be the most fundamental conditions for recreating glory.

However, as US public opinion has pointed out that no matter who will be appointed the new chairperson, it is "almost an impossible task" to "duplicate" Greenspan's success in applying the monetary policy. Greenspan hates rules, doubts about the economic mode and refuses to mechanically copy the practice greatly admired by others, instead, he is accustomed to making his own judgment after conducting analyses of huge amounts of economic data. He believes in flexibility and freedom from dogmas. Therefore, his successor will have no ready-made specific rules to follow, and instead he must rely on his own effort to blaze a trail to success.

Greenspan began to serve as chairman of US Federal Reserve in August 1987. Under his leadership, the policy of US Federal Reserve has greatly increased its transparency. In the past, the US Federal Reserve never openly announced the inter-bank interest rates of the previous night when it adjusted commercial banks. Nowadays, it not only immediately releases the interest rate decision, but also strongly hints the near-term policy trends. There is not only trust, but also even tacit agreement between the market and Greenspan. What new atmosphere will there be in the US Federal Reserve under the management of the new chairperson is also one of the concerns.

By People's Daily Online