Bank President Featured at M.B.A. Lecture
Alan Greenspan’s retirement in January as chairman of the Board of
Governors of the Federal Reserve prompted Federal Reserve Bank of
Richmond President Jeffrey Lacker to reflect on the Greenspan era
during the College of Business Administration’s Oct. 20 M.B.A.
He said the success of monetary policy during Greenspan’s term is
evident in the behavior of inflation. As the nation’s central bank,
the Federal Reserve sets monetary policy and supervises and
regulates member financial institutions.
Jeffery Lacker, Federal Reserve Bank of Richmond
president, left, and Roger Weikle, dean of Winthrop's
College of Business Administration, shared a few words
before Lacker's Oct. 20 lecture.
Since the late 1980s, inflation has fallen from an average of
over 4.5 percent to about 2.5 percent in recent years. Just as
importantly, Lacker said, inflation and inflation expectations have
become more stable as well. Greenspan used a practical approach to
policy that was not excessively tied to any one doctrine or
approach, he said.
“The Federal Reserve has worked hard over the years to shape the
public’s expectations regarding the conduct of monetary policy.
Central to those efforts has been the pursuit of what many call
credibility — that is, a reputation for pursuing low and stable
inflation,” Lacker said during the speech at Frances May Barnes
Recital Hall. “To my mind, building monetary policy credibility has
been the true hallmark of the Federal Reserve under Chairman
So what will interest rate policy look like in an after-Greenspan
world? The Federal Reserve will have to constantly monitor the state
of the economy, under the shocks that are affecting the economy’s
growth, such as energy costs, Lacker said.
“To preserve and build on the credibility we already enjoy, we
will need to continue to respond to changing economic conditions in
a way that confirms our commitment to low inflation,” he added. “Key
to this will be helping the public understand that we intend to
respond to future conditions in a way that keeps inflation low and
University officials were glad to host Lacker as its M.B.A. lecture
speaker: “ Interest rates in the U.S., as influenced by FED policy,
are important to every one of us but also to every
domestic business and the entire world," said Roger Weikle, dean of
the College of Business Administration. "This is exactly the kind of
person we want on campus, someone who knows how the system works but
also someone who will influence the decisions over the next year.
Dr. Lacker did a great job of bringing headlines to life and giving
us information to understand what will happen next. “
To read the entire speech, visit
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