Greenspan provided a steady hand

When you are bombarded with national news, it's sometimes difficult to pay attention. "How does this apply to me and my community?," you find yourself asking.

But, upon learning that Alan Greenspan is stepping down as chairman of the Federal Reserve Board, there were no questions in our mind how this man and this agency affects daily lives in McCook and other communities all across America.

As the Fed chairman, Greenspan has been the person primarily responsible for setting interest rates for the past 18 years. "That affects us here in McCook, just as surely as it does the financial markets in New York and London," said Van Korell of McCook, president and CEO of AmFirst Financial Services Inc.

Other local banking leaders expressed the same sentiment. Mark Graff, chairman of McCook National Bank and MNB Financial Group, said Greenspan has done a good job. "He has managed to maintain stability in the financial markets, despite a number of unexpected economic circumstances," Graff said.

Don Moore, president and CEO of First Central Bank-McCook, spoke about the tremendous responsibility Greenspan has had during the years he has been chairman of the Federal Reserve Bank. "He has a tough job. There are so many unforeseen circumstances. One day after new federal fund rates go into effect, a hurricane can hit, greatly changing economic circumstances," Moore said.

Moore and other area bankers have seen dramatic fluctuations in rates during their financial careers.

Once the Federal Reserve Bank sets the federal funds rate, changes in the prime interest rate quickly follows. Over the years, the prime has varied all the way from a high of 20 percent in 1980 (before Greenspan was chairman), to a low of 4 percent in June of 2003.

Currently, the federal funds rate is 3.75 percent, the discount rate is 4.75 percent and the prime rate is 6.35 percent.

Despite the war in Iraq and hurricanes here in home, Greenspan and the Federal Reserve Bank have managed to keep inflation in check for the past 18 years. Maintaining economic order has not only been essential for the nation, it has been the source of strength and stability for this area as well. As America prepares for transition -- with Ben Bernanke replacing Greenspan as Fed chairman -- we hope the same kind of strong, stable leadership continues for the Federal Reserve Bank.

As shown during the Greenspan era, the steady hand is essential for the smooth functioning of America's financial system.