Federal Reserve Governor Kevin Warsh, who was one of Chairman Ben S. Bernanke´s closest financial-crisis advisers before becoming the only governor to question the expansion of record monetary stimulus in November, resigned after five years at the central bank. Warsh, 40, a former investment banker who was the youngest- ever Fed governor when then-President George W. Bush appointed him in 2006, will leave "on or around March 31," he said in a letter today to President Barack Obama that was released by the Fed in Washington. His departure may give Bernanke a stronger hand to complete or potentially expand $600 billion in Treasury purchases through June. At the same time, Bernanke loses a link to Wall Street executives and Republican politicians as he carries out Congress´s overhaul of financial regulation and faces criticism from a political party that in the midterm election gained control of the U.S. House. "You lose a forceful internal advocate for ending QE and trying to renormalize policy quicker," said Vincent Reinhart, the Fed´s director of monetary affairs from 2001 to 2007, referring to the stimulus program known as quantitative easing.
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