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Akerlof, husband of Federal Reserve Chairwoman Janet Yellen stepped down after a hint that his position with the Swiss based organization might represent a conflict of interest.
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George Akerlof, the internationally respected Nobel Prize-winning economist, husband of Ms. Janet Yellen, the recently appointed Federal Reserve Chairwoman has nipped all speculation in the bud regarding possible conflicts of interest by stepping down from his position on the advisory board of UBS International Center of Economics in Society , based at the University of Zurich.
Akerlof’s resignation came only a few days after press reports began to speculate that there may be some conflict of interest, even though his membership of the board of what is ostensibly an academic center was without remuneration in any form.
Announcing his decision to give up his post on the advisory board, a spokesperson for the Federal Reserve attempted to calm any fears of conflicts of interest by pointing out that Mr, Akerlof’s board membership should only be viewed as a relationship between him and the University of Zurich, and in no way we with the UBS Banking Group.
UBS, who control considerable investment-banking interests in the United States and come under the jurisdiction of the Federal Reserve. Well before Ms. Yellen took up the post of chairman of the Federal Reserve in January of this year, the forthcoming Dodd-Frank financial overhaul that will hit banks with higher capital requirements and tougher U.S. supervision legislation has been pending. Legislation which is liable to see not only UBS but all other foreign banks become the subject of tougher capital requirements and increased supervision.
George Akerlof was one of eight members who sat on the advisory board at the UBS International Center of Economics in Society.
Founded only in 2012, the center receives its funding through a foundation established by UBS, currently around $100 million, which is set aside to provide academic positions at the University of Zurich as well as stages events on behalf of the University.
When speculation began to mount in the media regarding hint of a possible conflict of interest, a spokesperson for the UBS immediately responded with a statement pointing out that the bank has absolutely no influence over operations at the center, apart from appointing a separate and unaffiliated council whose role it is to oversee the center’s finances includes current and former senior UBS executives. In addition the International Center of Economics in Society chief operating officer is a former UBS employee, and it is possible that the center’s operations can be interpreted as providing a”marketing benefit” for the bank.
George Akerlof currently holds the role of Koshland Professor of Economics at the University of California, Berkeley. Mr. Akerlof was the recipient of the 2001 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, which he shared with Michael Spence and Joseph E. Stiglitz, for his work studying how markets can be hampered when buyers and sellers have different information. The paper entitled Efficiency Wage Models of the Labor Market was co-written with his wife Janet Yellen.
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