With the pending confirmation of New York Federal Reserve Bank President Timothy Geithner as treasury secretary in the Obama administration considered to be a foregone conclusion, the Federal Reserve Board will soon be picking a replacement to head up ground zero for the financial crisis.
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According to various published reports, the top candidates to emerge for the vacancies include:
- Kevin Warsh, Federal Reserve governor
- William Dudley, the New York Fed's director for markets and
- Donald Kohn, Fed vice chairman
All three have played a role in dealing with the credit crisis and have
strong ties to Wall Street, where the ability to deal with the CEOs of
the banks and the ability to hit the ground running are key. At the top
of the list, however, are Warsh and Dudley.
As a Fed governor, Warsh has been involved in developing strategy to
deal with the financial meltdown and has strong ties to Fed Chairman
Ben S. Bernanke and Stephen Friedman, the head of New York district
bank's board and former Goldman Sachs Group Inc. chairman. Warsh has
been a fast riser, but was criticized as being too inexperienced when
President Bush nominated him to fill a Fed vacancy in January 2006.
Most of the criticism was focused on his age -- at the time 35 years old, making him the youngest appointment in the history of the Federal Reserve -- and
lack of economic clout as he's an attorney, not a trained economist. However it
appears that Warsh has overcome most doubts about his ability over the
last three years.
Dudley also has an impressive resume to consider. As the current
director for markets for the New York Fed, he develops and supervises
the central bank's emergency lending programs. With plenty of
crisis management experience under his belt from 17-months in the
trenches, many staffers at the bank are pulling for him.
The Financial Times also has reported that the name of Fed Vice Chairman Donald Kohn is being suggested by Wall Street executives and former New York Fed
officials.
The New York Fed is expected to submit its preferred candidate, or top
picks, to the Fed board in Washington at the earliest in the first half
of next week, a source told Bloomberg. -
George White
See Bloomberg story
