In our latest post, we ask who the Board of the Fed of New York should pick. Our view: It’s time for an internal candidate a la Volcker and Corrigan.
“For the FRBNY, we urge the Board of the Federal Reserve Bank of New York to select from people either now serving, such as Terrence J. Checki, Executive Vice President and Head of the Federal Reserve Bank of New York’s emerging markets and international affairs group and William Rutledge, likewise head of the bank’s Bank Supervision function. Or consider an outsider who’s a member of the Fed family and who could easily serve at the Fed of NY or as Treasury Secretary: Brian Roseboro, former Under Secretary of the Treasury for Domestic Finance and now at JPMorgan Chase focused on public policy. A former head currency trader at the FRBNY and later worked in the private options industry in Chicago, Roseboro has the technical knowledge and market experience to understand the complex financial issues facing the US economy.
Tested professionals like those we highlight above are not alone within the Fed system. Christine Cumming, the Fed of NY’s First VP and de facto CEO, is another good candidate. Point is, the Board of the Fed of New York, which is dominated by Wall Street insiders, should look at them all and first, before going outside in the search for candidates. Remember, their predecessors like Paul Volcker and Gerry Corrigan were inside hires. It’s high time for the Fed to select from among its own ranks to broaden the pool of experience within the Fed’s Board of Governors and also within the Federal Open Market Committee. The Board of the NY Fed can do this by moving away from political patronage appointments and selecting from people with actual operational and financial skills that meet the needs of the public, as required by law. And no more academic economists please!”
You can read the entire issue of The Institutional Risk Analyst here:
The reason for the comment and especially the comment about the need for competent, experienced people relates back to my objections to Tim Geithner going to Treasury. I’ve heard people talk about moving Kevin Warsh from the Fed Board in DC to the NY Fed post. Please. Warsh is a political patronage appointment. Leave him in DC if at all.
Same with David Malpass, who is a friend and was embraced by the WSJ. I love David and respect his work, but the last thing that the Fed needs right now is another brilliant academic economist.
I have suggested some very experienced Fed insiders, including Terry Checki and Bill Rutledge at the FRBNY. Both of these people have decades of operational experience inside the Fed, dealing with financial institutions and the details of safety and soundness. They know the Street and the people who make it function. I submit that our nation cannot afford but to demand that we place people of competence, judgment and unquestioned ethics in post like Treasury and the Fed of New York.