New NY Fed chief’s ascent comes amid diversity worries

The head of the New York Fed is the second most important figure in the US central bank
AFP

Washington (AFP) – Career central banker John Williams rose Tuesday to the helm of the New York Federal Reserve Bank, the most important branch of the US central bank, but the pick has drawn criticism over the institution’s lack of diversity.

Williams, 55, who has been president of the San Francisco Fed since 2011, will replace William Dudley, who announced he is leaving the New York Fed this summer, a few months early. 

While the US President selects the head of the Federal Reserve and the board of governors — as President Donald Trump did when he named Jerome Powell to replace Janet Yellen — the 12 regional banks appoint their own leadership.

The head of the New York Fed is the second most important figure in the US central bank, since it has a permanent seat on the policy-setting Federal Open Market Committee (FOMC) which sets interest rates, while the other regional presidents rotate annually. 

The New York Fed also plays a key role in monitoring financial markets, and is responsible for implementing monetary policy through its market transactions. 

Williams, who earned a doctorate in economics from Stanford University, has spent nearly his entire career within the central bank system, starting out as a research economist. 

– Yellen’s former deputy –

He moved up to serve as Janet Yellen’s deputy when she ran the San Francisco branch. He then became president of the San Francisco Fed in 2011 when Yellen was named to the Fed’s board before herself becoming the first woman to lead the central bank in 2014.

Despite his qualifications, his appointment has drawn criticism since it fails to advance the Fed’s stated goal of improving diversity. The leadership of the Federal Reserve system is 80 percent male and 87 percent white. 

In 2017, economist Raphael Bostic was named president of the Atlanta Fed, the first African American to lead one of the regional banks in over a century.

“If we’re serious about creating an inclusive and sustainable economy, no one should be left on the sidelines,” New Jersey Senator Cory Booker wrote recently.

“The New York Fed has never had a woman or a person of color at its helm, and the Federal Reserve Bank only just last year added its first black regional bank president,” said Booker, who is African American.

Williams himself has argued for more diversity.

“Our record is not what it should be, and change has been too slow at best or sadly in some instances nonexistent,” he said in a 2016 speech titled “Diversity and Inclusion Without Excuses.”

.