Charles L. Evans, president of the Seventh District Federal Reserve Bank of Chicago, spoke at the annual Illinois Wesleyan Associates Luncheon.
Head of the Federal Reserve Bank of Chicago Addresses Associates Luncheon
May 14, 2010
BLOOMINGTON, Ill. – The economy is looking up, but change may come slowly, said Charles L. Evans, president of the Seventh District Federal Reserve Bank of Chicago, who was the featured guest speaker for the annual Illinois Wesleyan Associates Luncheon on Friday, May 14, in the Shirk Center at Illinois Wesleyan University.
“The economy is recovering from the recession, and I am optimistic it will continue to do so,” he said. “I think we have turned the corner.”
Speaking to the crowd of business and community leaders, Evans said he is seeing recovery in the broadest sense of economic growth, but realizes the signs of recovery are not always apparent. “The ‘for sale’ signs posted in yards, the empty storefronts and long waits for job seekers are powerful reminders of how serious the recession was, and how far below our potential we still are,” he said.
Evans attributes growth to several factors, including the economic stimulus, businesses spending on capital equipment and increased private spending -- though he said private spending may still remain lower as consumers struggle to pay down debt and battle unemployment. “In general, measures of economic activity show improvement early in a recovery, well before the job picture starts to get better,” he said, noting “muted gains in unemployment will hold back growth in wages and salaries.”
After his speech, Evans fielded several questions about the economic crisis in Greece, and what the effects will be for the United States. “Ah yes, Greece is the word,” he joked, before praising the current efforts being made by European agencies, with help from the International Monetary Fund, to curb the disaster. “They have been very aggressive and forceful with their actions, that I think will limit pressures,” he said of the $1 trillion package assembled to combat instability. He predicted the efforts would be great enough to stave off any major problems for the United States.
Charles L. Evans, president of the Seventh District Federal Reserve Bank of Chicago, fielded questions from the media before addressing business and community leaders.
Evans’ district covers 50 counties of northern Illinois, the state of Iowa, 68 counties in Indiana, 68 counties of southern Michigan and 46 counties of southern Wisconsin. When queried about the number of bank closures in Illinois, Evans said the number disappointed him, but he said the Fed, and other agencies, had to rethink the concept of recovery with the current recession. “We lacked the alternatives that would have allowed for the orderly unwinding of these large, complex financial institutions,” he said of the larger banks that needed rescue, noting the system had not been modified since the Great Depression. He urged for a better way to help institutions – both banking and nonbanking. “We need an effective process to resolve failing nonbank institutions [to] limit market disruption and minimize moral hazard,” he said. Evans added he believes systematic risk controls and regulators will help meet those needs.
Overall, Evans noted, the Fed faces a great balancing act. “These two years have been a constant reminder that as a central bank of the United States, [the Fed] helps provide liquidity to stressed financial markets,” but still meets the needs of “the goals of growth and stability,” he said.
Prior to the luncheon, Evans, who also serves as an alternate voting member of the Federal Open Market Committee (FOMC), participated in a closed roundtable with local dignitaries, which included the mayors of Bloomington and the Town of Normal, several banking leaders and representatives of several legislative districts.
The luncheon where Evans spoke is an annual event for Illinois Wesleyan Associates. Founded in 1953 with Adlai H. Rust and Clarence W. Heyl as co-chairmen, the group consists of business and professional leaders interested in the advancement and support of private higher education. This academic year, there have been 145 area students who have received financial aid for education through the Associates, totaling $1.2 million, said Associates President Willie Brown. “Continued support is more critical than ever given the current economy,” Brown said, urging those attending the luncheon to “stay in their own backyard” when it comes to financial support of students, and help local youth reach their higher education goals.
One of the student recipients of financial assistance spoke at the luncheon. Senior Evan Kasprzak, who was in the finals of the Fox TV show So You Think You Can Dance? said he chose Illinois Wesleyan because he wanted a liberal arts education. “The second I set foot on this campus, I knew Illinois Wesleyan was right for me,” said Kasprzak. The recipient of two scholarships to attend Illinois Wesleyan made a difference, he added. “On behalf of the students, I want to thank you for your investment in our education.”
Contact: Rachel Hatch, (309) 556-3960