Dec 13 (Reuters) - Stanley Fischer, who led the Bank of Israel for eight years and whose former students include U.S. Federal Reserve Chairman Ben Bernanke and European Central Bank President Mario Draghi, is being considered for the Fed's No. 2 post, according to a source familiar with the issue.
If nominated by U.S. President Barack Obama and confirmed by the U.S. Senate, Fischer would succeed Janet Yellen, who is expected to win confirmation to be the next Fed chair later this week.
As Yellen's deputy, he would have an influential role in shaping the Fed's exit from its bond-buying stimulus, or quantitative easing, and its eventual return to more normal interest-rate levels.
Fischer has served as the No. 2 official at the International Monetary Fund, and taught economics at the Massachusetts Institute of Technology and the University of Chicago. He also worked as a top executive at Citigroup.
Here is a look at what he has said about important monetary policy and economic issues:
QUANTITATIVE EASING IS EFFECTIVE
'It's very hard to reach the conclusion that the unorthodox measures are ineffective,' he said at an IMF forum on Nov. 8.
'Without the Fed, we'd have had a much deeper recession. Without the extraordinary things that it's done the economy would be in much worse shape today, and we need to remember that,' he said at an event sponsored by the Wall Street Journal in November.
QUANTITATIVE EASING IS UGLY
'Actually it fills me with a sense of worry. It's not like doing ordinary monetary policy. It's messy, and it's ugly: you are always struggling to come up with something. And if we didn't have to be in this world, it would be much better. But we do have to be in this world. And we are trying to deal with it,' he told an IMF meeting on April 18.
QUANTITATIVE EASING POSES DANGERS
'Precisely how to get out of it, at what speed to get out of it, is a much harder thing to measure and to calculate,' he told the Wall Street Journal in November. 'You are beginning to see housing prices take off in the United States. But these are things which you can watch closely. Everybody knows now about asset prices. And presumably they will take that into account and moderate policy accordingly. Yes it's dangerous, but it was necessary.'
FED TAPERING WILL MAKE LIFE EASIER
'As governor of a central bank a few months ago,' Fischer said on Aug. 22, 'I was looking forward to the beginning of the tapering because we really need to get back to more normal conditions, more normal monetary policy in the United States, interest rates at more normal levels. That will make life easier for a lot of countries and a lot of people.'
FORWARD GUIDANCE IS DIFFICULT
'You can't expect the Fed to spell out what it's going to do,' Mr. Fischer told a conference in Hong Kong, according to the Wall Street Journal. 'Why? Because it doesn't know... We don't know what we'll be doing a year from now. It's a mistake to try and get too precise... If you give too much forward guidance you do take away flexibility.'
FORWARD GUIDANCE IS GOOD
'I think what he is doing is very good,' Fischer said on Aug. 20 of Bank of England's new Governor Mark Carney. 'Mark is trying to push this commitment, this Bernanke-like commitment, or Fed-like commitment - to saying we're not going to raise the interest rate until unemployment gets to a certain level.'
HIGH INFLATION HURTS GROWTH
'Periods of inflation are associated with bad macroeconomic performance,' he wrote in a 2002 IMF working paper. 'In particular, high inflation is bad for growth.'
INFLATION THAT IS TOO LOW IS ALSO BAD
'When the inflation rate goes below the target range, policies are needed to revive the economy and bring inflation back up to target,' Fischer said at an IMF conference in 2000. 'The first reaction of a central banker is always to recoil in horror at the suggestion of pursuing a higher inflation rate. That is not something we thought about in the past 40 years. But it is necessary now: inflation can be too low, as well as too high.'
ON GROWTH IN CHINA, INDIA
'My guess is that China will turn out more positive than expected - it will be about 8-percent growth' he said in November. 'India is a great disappointment. I don't know if you want to go so far as call it a dud. It's doing things that do not make a lot of sense economically.'
(Reporting by Ann Saphir; Editing by Chizu Nomiyama) Keywords: USA FED/FISCHER
(Ann.Saphir@thomsonreuters.com)(415-677-2516)(www.twitter.com/ annsaphir)(Reuters Messaging: email@example.com)
Copyright Thomson Reuters 2013. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.