Exclusive-Biden to nominate economist Shambaugh as U.S. Treasury’s international chief

FILE PHOTO: Signage is seen at the United States Department of the Treasury headquarters in Washington, D.C., U.S., August 29, 2020. REUTERS/Andrew Kelly

February 25, 2022

By David Lawder

WASHINGTON (Reuters) – U.S. President Joe Biden intends to nominate Jay Shambaugh, a George Washington University professor and former Obama administration economic adviser, as the U.S. Treasury’s next undersecretary for international affairs, a White House official said on Friday.

If confirmed by the U.S. Senate, Shambaugh, an expert in international monetary, fiscal and exchange rate policy, will fill a long-vacant post as the Treasury’s top diplomat, working to coordinate economic policy with international counterparts.

Andy Baukol, a longtime Treasury career assistant secretary, has been serving as acting undersecretary and leading Treasury’s negotiations in the G7 and G20 groupings of major economies.

David Lipton, a senior Treasury adviser and former No. 2 official at the International Monetary Fund, also has been helping to guide Treasury’s international policies for the past year. These initiatives included an unprecedented $650 billion distribution of IMF monetary reserves to member countries and a global deal for a 15% corporate minimum tax.

Shambaugh’s nomination comes as the administration seeks to rally international support for stiff financial sanctions against Russia over its invasion of Ukraine and coordinate policies to sustain the COVID-19 recovery and fight inflation.

As undersecretary for international affairs, Shambaugh would oversee the Treasury’s dominant shareholdings in the IMF and the World Bank, which will play significant roles in the aftermath of the Ukraine conflict. The institutions are also seeking to push countries to step up actions to restructure debts of poor countries, warning of a growing risk of defaults.

A meeting of G20 finance leaders last week failed to meaningfully strengthen the group’s debt restructuring framework, amid objections from China and disagreements with Russia over geopolitical risks.

Shambaugh served as a member of the White House Council of Economic Advisers from 2015 to 2017 during the Obama administration and previously served on the CEA staff as senior economist for international economics and chief economist. He served on the Biden administration’s CEA transition team.

As a tenured professor of economics and international affairs at George Washington University’s Elliott School of International Affairs since 2013, Shambaugh’s research has focused on the interaction of exchange rate regimes with monetary policy, capital flows and trade flows, according to his website.

Shambaugh has also studied international reserves holdings, country balance sheet exposure to exchange rates, and the euro area’s crisis a decade ago.

From 2017 to 2020, Shambaugh also led the Brookings Institution’s Hamilton Project, a grouping of academics and business leaders that promote broader participation in economic growth. He holds a doctorate in economics from the University of California-Berkeley.

(Reporting by David Lawder; Editing by Chizu Nomiyama)

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