You are here

John Williams seen as top candidate for president of New York Fed: sources

New York

JOHN Williams, an economist and longtime Federal Reserve official, is a top candidate for president of the Federal Reserve Bank of New York, according to two people familiar with the search process.

Mr Williams, 55, now leads the San Francisco Fed, where he has been president since 2011. If he is appointed, he would succeed William Dudley, who announced in November that he planned to retire this summer after nine years in the job.

Leading the New York Fed would be a significant promotion: The position is one of the most influential within the Federal Reserve system, and arguably the most significant economic policy position not controlled by President Donald Trump.

The president of the New York Fed, uniquely among the leaders of the 12 regional reserve banks, has a permanent vote on the Fed's policymaking Open Market Committee and serves as the committee's vice-chairman. The bank also plays a crucial role in overseeing many of the country's largest financial institutions.

Mr Williams' selection is not final. By law, the president is chosen by a subset of the New York Fed's board of directors and must be approved by the Fed's Board of Governors in Washington. A person familiar with the search process said neither group had formally voted on Mr Williams, and cautioned that the situation could change.

Representatives for the New York and San Francisco banks declined to comment.

In mid-March, the New York Fed said it had narrowed its search to "a handful of final candidates". News of Mr Williams' likely selection was first reported by The Wall Street Journal.

Mr Williams and Mr Dudley have similar résumés in some respects: Both have doctorates in economics and held advisory roles in the Federal Reserve system before rising to their current positions. Mr Dudley, however, also spent time on Wall Street as chief economist for Goldman Sachs. Mr Williams, by contrast, has spent nearly his entire career at the Fed and has never worked in the finance industry.

Left-leaning economists and activist groups have criticised the New York Fed for having too cozy a relationship with big banks and have urged the search committee to look for candidates who would be independent from Wall Street. Nonetheless, progressive groups were sharply critical of Mr Williams' reported candidacy.

"It's deeply disappointing and a missed opportunity," said Shawn Sebastian, director of the Fed Up campaign, which advocates policies that promote full employment. "This process began with a lot of talk from the Federal Reserve about diversity - diversity of background and diversity of experience."

Mr Williams' regulatory record will be important, given the New York Fed's role in Wall Street oversight. One of the major banks in his backyard, Wells Fargo, engaged in aggres-sive sales practices that resulted in millions of accounts being opened without customers' knowledge.

The San Francisco Fed has recently pushed for major structural changes to Wells Fargo, and the Fed last month announced tough penalties on the company. NYTIMES