It may be the trickiest job to fill in central banking. And as the Federal Reserve Bank of New York search committee casts a wide net to find a replacement for its outgoing president, William Dudley, the wish list is getting long.
Interviews with 10 members of the Fed’s advisory boards, which the committee is consulting, suggest they want a president with market expertise, crisis-management chops, strong leadership abilities, an eye on inequality and an ear for regional trends.
The jury is out on whether he or she should be an economist, even though the New York Fed president traditionally plays a big role in guiding U.S. monetary policy. Some advisers are pushing for a woman or a minority and one of the search firms hired by the committee is focusing on just such picks.
It’s a powerful position so the stakes are high, and the appointment will come amid broader changes in Fed leadership. Jerome Powell has been nominated to replace Janet Yellen as chairman in February and the vice chair slot is vacant.
The New York president has a permanent vote on monetary policy, elevating the appointee relative to the other 11 regional Fed bank presidents, who vote on a rotating basis. The person oversees both big-bank supervision and market operations that manage the Fed’s policy rates and balance sheet, which it is carefully shrinking. And beyond that, the job entails keeping close tabs on the region’s diverse economy.
“I’m hoping for someone who is as sensitive to information that’s nonconventional, nontraditional, as Bill Dudley was,” said Joseph Carbone, chief executive at The WorkPlace, a workforce development agency, and a member of the bank’s Community Advisory Group. “I want someone who’s going to be willing to look deeply into the numbers and spend as much time talking about the forgotten population.”
Carbone sits on one of four advisory groups that the search committee has already canvassed, based on the minutes from their meetings. The search’s leaders have been explaining the process, soliciting suggestions and asking advisers to name possible candidates, based on members’ accounts.
The committee hasn’t publicized a long list, but Peter Blair Henry — outgoing dean of New York University’s Stern School of Business — has been suggested, according to advisory board members. New York Fed insider Simon Potter, who runs its markets group, Brian Sack, who previously held that position, and former senior Fed Board staffer Nellie Liang have also been discussed as potential candidates.
In addition, former Treasury economist Karen Dynan has been floated, as has Northwestern University economist Janice Eberly, JPMorgan Chase's Sandra O’Connor and UBS Securities economist Seth Carpenter.
The New York Fed says on its website the process is expected to take six to nine months. Dudley plans to retire in mid-2018.
Finding a perfect candidate could be tricky. Because the New York Fed oversees banks and operates in markets, someone with Wall Street experience is ideal — yet at the same time, it’s important to find a candidate who isn’t beholden to the banks.
The committee, chaired by Glenn Hutchins and his fellow New York Fed director Sara Horowitz, is consulting the Fed-affiliated groups alongside academics, business people and labor groups as it compiles a candidate roster.
The bank has hired search firms Spencer Stuart and Bridge Partners, which focuses on diversity, to help with the process. The committee has listed specific qualifications in a detailed job description.
To date, search leaders have been gathering information, based on the adviser accounts — they don’t seem to be winnowing a shortlist yet.
The Community Advisory Group met with search committee members Denise Scott and Glenn Hutchins, along with Hillary Mann from Spencer Stuart and Shawn Phillips from the New York Fed, on Nov. 15.
The discussion centered on attributes the next president ought to have, said Claas Ehlers, chief executive of the homelessness-focused nonprofit Family Promise. The Advisory Council on Small Business and Agriculture also met with Phillips and a search firm representative on Nov. 7.
“It was pretty much made clear that if you had a specific name, you might want to email it after the fact, but we weren’t there to talk about specifics,” said Michael Arnoff, head of Arnoff Moving and Storage in Poughkeepsie, N.Y., and a member of the council.
The Financial Advisory Roundtable met with Phillips in November to discuss succession, and the Economic Advisory Panel had a similar consultation. Women at that meeting stressed the importance of finding a diverse pick, said Julia Coronado, president and founder of Macropolicy Perspectives LLC.
“You’re going to have the cream of the crop to choose from. There are women and minorities in that cream of the crop, and you should use that opportunity,” Coronado said.
Diversity is in keen focus after the Richmond Fed presidency recently went to a white man and after President Donald Trump named three white men to open spots on the Fed’s politically appointed board in Washington — including Powell’s pick to replace Yellen, the first woman to lead the institution.
“They’re thorough — they brought the recruiters in, they’ve been sending emails; the search is on,” said Charles Feit, chief executive at Onforce Solar and one of the small-business group’s members. “The good thing is that they’re not operating in a bubble.”
