FRANKFURT, Germany ¨C Incoming U.S. Federal Reserve Chair Kevin Warsh¡¯s suggestion that independence may not extend fully to the Fed¡¯s crisis-fighting role abroad has unsettled central banking peers, who fear any reduction in its global footprint could risk market stability.
With the dollar by far the world¡¯s most used currency, the U.S. central bank plays a pivotal role in stabilizing financial markets during periods of stress. It has expanded its crisis-fighting tools over time to keep funding flowing.
But Warsh ¡ª U.S. President Donald Trump¡¯s pick for the job ¡ª raised eyebrows by suggesting that outside monetary policy, including in international ?finance, the Fed needs to work closely with the presidential administration and Congress.
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