Despite objections from advocacy groups, the central bank has announced that its rumored top candidate will take over when the president of the New York Fed leaves this summer
A controversial pick to head the New York Federal Reserve Bank was made official Tuesday.
John Williams, currently president of the San Francisco Fed, will leave that position to become president of the New York Fed, the central bank announced. Williams will replace William Dudley, who is leaving in June.
“I look forward to joining the talented team of New York Fed colleagues and to carrying out the unique responsibilities entrusted to us to protect the economic prosperity and financial stability of the United States’ economy,” Williams said in a statement.
Observers have criticized the pick, with some advocacy groups and lawmakers saying that elevating Williams to head the central bank’s most important regional branch showed a lack of commitment to diversity and continued the Fed’s “opaque” process of choosing leaders.
Nonprofit advocacy group Better Markets, meanwhile, said that giving Williams the New York Fed post would be rewarding failure, as the San Francisco Fed failed to rein in systemic abuses by banking giant Wells Fargo, which falls under its jurisdiction.
“After being AWOL and failing to stop Wells Fargo’s decade-long illegal conduct, the president of the San Francisco Fed should not be promoted to be president of the most important regional office in the entire Federal Reserve System, the New York Fed,” Better Markets president and CEO Dennis Kelleher said in a statement. “That would reward failure and send the wrong message to the biggest banks in the country that the Fed really does not take bank supervision seriously or understand its mandate to protect bank customers from illegal and predatory conduct.”