The search for a new Boston Fed to be “open” amid calls for diversity

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The Federal Reserve Building is pictured in Washington, USA, March 19, 2019. REUTERS / Leah Millis / File Photo

Sept. 28 (Reuters) – The search for a new Boston Federal Reserve chief will be “full, rigorous and open,” with details to be announced shortly, a bank spokesperson said on Tuesday.

Boston Fed Chairman Eric Rosengren and Dallas Fed Chairman Robert Kaplan abruptly announced their impending retirement on Monday amid questions about the ethics of their corporate actions last year, as the Fed was taking extraordinary measures to support the markets and the economy.

The commercial uproar and subsequent departures shine a light on the regional outposts of the US central bank, whose heads are chosen not by the White House but by local boards, with input and approval of the Board of Governors of the Fed. Read more

Although Fed Chairman Jerome Powell says diversity is a top priority for the institution, research by Fed bank presidents has drawn criticism for their limited success in this regard.

Of the 12 Fed bank presidents, seven – including the two outgoing Fed bank chiefs – are white males.

In recent years, the Fed has made a concerted effort to lay the groundwork for a more diverse Fed leadership by selecting a more diverse set of directors to head the boards of Fed banks. Read more

The question now is whether this strategy will pay off.

“We need leadership from the Fed that has the economic interests of the public at heart and that is as diverse as the country it represents,” said Benjamin Dulchin, Fed Up campaign director, after the resignations of Monday.

Fed banks typically hire the services of a search firm to help them hire a new boss. Neither Boston nor Dallas have done so yet.

A Dallas Fed spokesperson provided no immediate details of the upcoming research.

Reporting by Ann Saphir Editing by Chizu Nomiyama

Our standards: Thomson Reuters Trust Principles.

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