Kansas City Fed chief to retire in January

Diving Brief:

  • Esther George, president of the Federal Reserve Bank of Kansas City, will retire in January, the bank announced. in a press release Wednesday.
  • George’s departure will leave a second vacancy at the head of a regional Fed bank, with the Chicago Fed announcing last month that its top official, Charles Evans, would also be resign early 2023.
  • George is widely regarded as one of the Fed’s most hawkish regional chairs. She had the highest percentage of dissenting votes on the Federal Open Market Committee (FOMC) meetings, The Wall Street Journal reportedciting data from wrightson ICAP.

Overview of the dive:

George, a 40-year veteran of the Kansas City Fed, has led the institution since 2011. Her departure comes as she reaches the mandatory retirement age of 65.

She would be the fourth regional Fed chief to report leaving office since September, when financial disclosure forms revealed that Boston Fed President Eric Rosengren and Dallas Fed President Robert Kaplan, had traded stocks while helping set monetary policy in the run-up to COVID. -19 pandemic. The Federal Reserve has since issued new rules prohibiting its board governors and 12 regional chairmen from buying individual stocks, holding investments in individual bonds or agency-backed securities, or entering into derivative contracts – or to enter into transactions “during periods of heightened financial market stress. ”

The flurry of overtures at the top of regional Fed outposts has also prompted lawmakers to ask the central bank to appoint more diverse leaders. The Boston Fed chose University of Michigan economist Susan Collins in February to become its next chair, effective July 1. She would become the first black woman to lead a regional Fed bank.

The Dallas Fed, meanwhile, named New York Fed executive vice president Lorie Logan as its next leader, effective Aug. 22. His nomination drew backlash from Sen. Bob Menendez, D-NJ, and other lawmakers who drafted the central bank’s satellite urging its nominating committee to choose a Latino to lead the bank.

The Kansas City Fed Board of Directors pledged on Wednesday to find a diverse and qualified pool of candidates to replace George.

“Our challenge is to select a leader who can continue to build on the Bank’s excellent reputation and provide a thoughtful and independent view of monetary policy,” maria GregoRaby, chairman of the bank’s research committee, said in a press release. “Under Esther’s leadership, the Kansas City Fed has continued to deliver operational excellence in its mission areas of financial services and financial institution supervision, as well as maintaining a strong commitment to the commitment of the audience.”

George is one of 11 regional Fed chairs who hold rolling votes on the FOMC. Four of the regional presidents vote each year, along with the president of the New York Fed and the board of governors. The Kansas City Fed president has a vote on the committee this year.

The Kansas City Fed oversees monetary policy in the second-largest geographic area among the Fed’s 12 regional banks, in Colorado, Kansas, western Missouri, Nebraska, northern New Mexico, Oklahoma and Wyoming.

George’s name surfaced earlier this year during Senate debates over the failed nomination of Sarah Bloom Raskin as vice chairman of Fed oversight.

Sen. Cynthia Lummis, R-WY, suggested Raskin used her status as a former Fed governor to help the fintech Reserve Trust – where she served on the board – secure a primary account with the bank center after the refusal of his first request. .

Raskin repeatedly declined during the hearing to say whether she called the Kansas City Fed on behalf of Reserve Trust. She then submitted a written statement to Sen. Pat Toomey, R-PA, stating that she “did not recall any communication I had made to assist Reserve Trust in obtaining a lead account.”

Toomey, the senior member of the Senate Banking Committee, claimed in a letter after the hearing that George herself told her that Raskin phoned her directly in 2017.

Michael J. Birnbaum