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Senate Banking Committee Confers on New Fed Governor

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The Committee on Banking, Housing, and Urban Affairs met Tuesday to discuss Dr. Peter Diamond's nomination to the Board of Governors of the Federal Reserve. The full committee met at 3:15 p.m EST to discuss problems in mortgage servicing, as well as Diamond's nomination.

A hearing of the webcast is available at Diamond was nominated for the post in July, but was opposed by Republican senators who said he did "not have the appropriate monetary policy background to join the central bank," the Wall Street Journal reported Nov. 9.

According to Diamond's July 15 testimony before the Senate Banking Committee, he studied mathematics and economics at Yale University, before receiving his Ph.D. in economics from the Massachusetts Institute of Technology in 1963. In October, he was awarded the Nobel Prize for economics.

The Fed is under increasing pressure from conservatives. Rep. Mike Pence, R-Ind., chairman of the House Republican Conference, and Sen. Bob Corker, R-Tenn., member of the Senate Banking, Housing and Urban Affairs Committee held a press conference on Tuesday calling for an "elimination of the dual mandate of the Fed."

“It is time that we work to clarify the mandate of the Federal Reserve," Corker said in a statement. "Providing our central bank with a clear and explicit focus on keeping inflation low will serve America better than the broader mandate approach we have today.”

Pence introduced a bill Tuesday that would "end that dual mandate and put the Fed back in the business of solely focusing on price stability and preventing inflation," according to a separate statement.

Pence insisted that the Fed's role should be solely that of inflation control. While acknowledging unemployment's affect on Americans, he attributed responsibility for controlling it to Congress and the president.

"The Fed’s full employment mandate has, too often, led to short-term fixes with long-term inflationary consequences that will not lead to job creation," Pence said in a release. "It’s time to return the Federal Reserve to the singular mission of protecting the fundamental strength and integrity of the dollar.”

On Monday, conservatives launched a campaign to urge Chairman Ben Bernanke to abandon the quantitative easing plan announced earlier this month.