By Michael S. Derby 

The Federal Reserve said Thursday that all 12 regional bank presidents and their current seconds-in-command are approved for new five-year terms.

The little-known renomination process happens every five years. It is implemented by the boards that oversee the regional Fed banks and the Fed board in Washington. Fed governor Lael Brainard oversaw the process this time, while in the last cycle it was Jerome Powell, before he was elevated to Fed chairman in 2018.

The process that led to all the regional bank presidents staying on was "rigorous," Ms. Brainard said.

"The leaders of our reserve banks play a vital role in supporting the economic health of communities across our country," Ms. Brainard said. "Over the past year alone, this has been apparent in the many ways they have been engaged in the Federal Reserve's responses to the Covid crisis and the national discussion on systemic inequities," she said.

No officials were fired in this process. Michael Strine, the first vice president of the New York Fed, didn't participate because of his retirement, which was scheduled for this year. A search to fill his position is ongoing.

The Fed's 12 regional banks are quasi-private institutions overseen by boards whose members are drawn from the private sector. The regional banks are also overseen by the Washington-based Board of Governors.

Regional Fed banks contribute to monetary policy deliberations, produce economic research, work on community development, regulate banks, operate payment systems, process checks and operate Fed emergency lending facilities. According to the Fed's 2019 annual report, regional Fed banks employed around 18,000 workers. In 2020, preliminary operational expenses for the 12 regional banks was $4.5 billion.

In the renomination effort, Fed bank presidents and their lieutenants are judged broadly on the operations of their banks and for their engagement with local communities. They aren't judged for being wrong or out of step with their colleagues when it comes to economic and monetary policy issues, given that Fed leadership values diverse views among its policy makers.

Regional Fed bank presidents are well paid relative to their Washington-based colleagues. As of 2019, John Williams of the New York Fed was paid $497,800 a year. The lowest paid regional Fed bank president, St. Louis's James Bullard, was paid $392,400. Fed bank leader pay is determined by a formula that takes into account cost-of-living differences.

The renomination process has courted controversy in the past, in part because it hasn't formally led to anyone losing their job, raising concerns among some that the process rubber stamps new terms for the bank presidents, many of whom have historically stayed in their jobs for many years.

Some also have expressed concern that there is no formal way for the broader public to weigh in, although in this renomination cycle, those overseeing it sought commentary from outside groups.

Write to Michael S. Derby at


(END) Dow Jones Newswires

January 21, 2021 19:15 ET (00:15 GMT)

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