Janet Yellen nominated by Obama to head US Federal Reserve

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Media captionJanet Yellen: "I'm honoured and humbled by the faith you've placed in me"

US President Barack Obama has officially nominated Federal Reserve vice-chair Janet Yellen to be the next head of the US central bank.

He called her one of the nation's foremost economists and policy makers.

Ms Yellen said if confirmed by the Senate she would do her utmost "to promote maximum employment, stable prices and a stable financial system".

She said more needed to be done to strengthen the US economy although progress had been made recently.

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Media captionPresident Obama: "She sounded the alarm early about the housing bubble"

The president praised Ms Yellen's ability to build consensus and listen to competing views.

He added that she was "committed to increasing employment and understands the human costs when Americans can't find a job".

If the nomination is confirmed by the US Senate, Ms Yellen, 67, would replace Ben Bernanke, who has held the post for eight years.

She has been his deputy for the past two years, and would become the first woman to head the Federal Reserve.

She has taught at Harvard University and the London School of Economics, as well as holding a series of senior administrative positions in the US.

'Depth of experience'

Ms Yellen, like Mr Bernanke, is seen as a "dove", meaning she prefers to prioritise boosting employment by keeping rates low rather than worrying about inflation.

Her nomination had been widely expected since former Treasury Secretary Larry Summers withdrew his candidature last month amid opposition from liberal Democrats.

As Democrats control the 100-seat Senate, Ms Yellen's appointment would only need six Republican votes to overcome potential any procedural hurdles.

Some conservatives are scrutinising her views on monetary policy and her support for previous federal stimulus efforts.

On Wednesday, the second-most powerful Republican in the Senate questioned whether she was the right choice.

"Ms Yellen subscribes to the liberal school of thought that the best way to handle our nation's fiscal challenges is to throw more money at them," John Cornyn of Texas, the party's whip in the Senate, said in a statement.

"This stimulus obsession is the reason the nation finds itself in the fiscal calamity it does today, and the last thing we need is a leader at the helm of the Federal Reserve who is intent on more quantitative easing that harms our economy."

Senator Bob Corker, a leading Republican on the banking committee, said in a statement: "I voted against Vice-Chairman Yellen's original nomination to the Fed in 2010 because of her dovish views on monetary policy."

"We will closely examine her record since that time, but I am not aware of anything that demonstrates her views have changed."

'Battle tested'

But Democratic Senator Charles Schumer said Ms Yellen would win Senate confirmation "by a wide margin".

The chairman of the US Senate banking committee, Tim Johnson, said she had "a depth of experience that is second to none".

"I have no doubt she will be an excellent Federal Reserve chairman," he added.

The BBC's chief business correspondent, Linda Yueh, says the transition from Mr Bernanke to Ms Yellen is likely to be "seamless" and will not have much impact, because the two already work so closely together.

"I don't think there's going to be a radical change," she said on Radio 4's Today programme, adding that the changeover was unlikely to alter the timing of the Fed's withdrawal of economic stimulus.

Ms Yellen's most recent academic post was at the University of California, Berkeley. A former colleague there, Laura Tyson, professor of business and economics, told the BBC Ms Yellen's nomination was "terrific news".

"We have an outstanding candidate who is a wonderful match of skills and experience and temperament and reputation around the world at a time when monetary policy is extremely important," she said.

"Continuity is important and Janet is an outstanding candidate."

A former member of the board of governors of the Federal Reserve, Prof Randy Kroszner, told the BBC that Ms Yellen was "battle tested" and would be driven by the data in deciding when to reduce support to the markets.

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