WASHINGTON, May 22 (Xinhua) -- U.S. senators introduced legislation on Tuesday to bar bank executives from serving at the boards of directors of the Federal Reserve's 12 regional banks.
The newly proposed measure came days after a 2-billion-U.S.-dollar loss at JPMorgan Chase, whose CEO Jamie Dimon is on the board of directors of the New York Fed.
"Allowing currently employed banking industry executives to serve as directors on the boards of directors of Federal Reserve banks is a clear conflict of interest that must be eliminated," independent Senator Bernie Sanders, the bill's chief author, said in the text of the bill.
The U.S. Congress created the Fed nearly a century ago with a mix of public and private features, including 12 regional banks with private banking executives on their boards of directors.
Current law allows each of the 12 regional Fed banks to have a nine-member board of directors. Six of those directors are appointed by banks that are members of the Federal Reserve System. The remaining three are appointed by the Fed's Board of Governors in Washington D.C.
The new bill would make all nine members appointed by the Board of Governors. The governors are political appointees, nominated by the president and confirmed by the Senate.
There is "not a perceived conflict, but a real conflict of interest when bank presidents and employees of banks sit on the very boards that regulate them and sometimes bail them out," said Barbara Boxer, a Democratic senator.