S.F. Fed chief will transfer to New York
The Federal Reserve’s top official on the West Coast has been chosen to head its powerful New York regional bank, a controversial choice because he helped regulate Wells Fargo & Co. during its fake-accounts scandal and is another white man at an institution that critics complain sorely lacks diversity.
John Williams, an economist who has been president of the Federal Reserve Bank of San Francisco since 2011, was announced Tuesday as the next president of the Federal Reserve Bank of New York. The selection was made by the bank’s board of directors and approved by the Fed’s Board of Governors in Washington.
The choice does not need Senate confirmation. Williams
will take over on June 18, succeeding retiring William Dudley, who announced last fall he would step down after holding the job since 2009.
“After a thorough process, my fellow search committee members and I felt that John best fulfilled the criteria we’d identified as well as the feedback we’d received through our public outreach efforts,” said Sara Horowitz, founder of the Freelancers Union and chairwoman of the New York Fed’s board.
The New York Fed presidency is the most influential among the 12 regional Fed banks. The New York Fed oversees some of the nation’s largest financial institutions on Wall Street, and its president serves as the vice chairman of the central bank’s monetary policymaking committee.
Williams has worked at the Fed since earning his doctorate at Stanford University in 1994, taking a one-year leave of absence in 1999 and 2000 to serve as senior economist at the White House Council of Economic Advisers under President Clinton.
“I look forward to joining the talented team of New York Fed colleagues and to carrying out the unique responsibilities entrusted to us to protect the economic prosperity and financial stability of the United States’ economy,” Williams said.
But the choice of Williams is not popular among some Democratic lawmakers and liberal activists.
The San Francisco Fed helps regulate Wells Fargo, and the bank’s creation of millions of accounts without customer authorization took place under Williams’ tenure. Former Wells Fargo Chief Executive Officer John Stumpf, who retired in 2016 in the wake of the scandal, had served as the San Francisco Fed’s representative on a Federal Reserve advisory committee.
“Mr. Williams’ track record raises several questions, including about his fitness to supervise Wall Street banks given the San Francisco Fed’s inadequate supervision of Wells Fargo during its many consumer scandals,” Sen. Elizabeth Warren, D-Mass., said last month in response to reports that Williams would get the job.
“If Mr. Williams is selected, the Fed’s Board of Governors should not approve his selection until Mr. Williams and the co-chairs of the New York Fed’s search committee testify before the Senate Banking Committee about his qualifications and the process that led to his selection,” she said.
There are only two female presidents among the leaders of the Fed’s 12 regional banks, Loretta Mester in Cleveland and Esther George in Kansas City. Last year, Raphael Bostic became the first African American to lead a Fed regional bank when he was chosen as president of the Atlanta Fed.
A number of New York officials, including New York City Mayor Bill de Blasio, had also raised concerns about a lack of diversity in the search process.
Sen. Kirsten Gillibrand, D-N.Y., said in a statement: “The New York Fed has never been led by a woman or a person of color, and that needs to change.”
Williams, 55, became president of the San Francisco Fed in 2011, succeeding Janet Yellen, the first woman to serve as Fed chair. She said Tuesday that she strongly supported Williams’ selection for the New York job. During Yellen’s four years leading the Fed, Williams was viewed as an ally who supported her cautious, gradual approach in raising interest rates.
“He is a distinguished economist who has made major contributions to the formulation of monetary policy,” Yellen said in a statement.
Shawn Sebastian, field director of Fed Up, a campaign by labor, community and liberal activist groups that wants the Fed to enact pro-worker policies, said the choice of Williams damaged the Fed’s legitimacy and credibility.
“Today, the Federal Reserve concluded another opaque and controversial Reserve Bank presidential selection process by ignoring the demands of the public and choosing yet another white man whose record on Wall Street regulation and full employment raises serious questions,” he said.
Horowitz and other leaders of the New York Fed’s search committee had said they were committed to a wide-ranging search that stressed diversity, integrity and values. They said they hired two search firms, including one that focuses on diversity issues.