Dive Brief:
- Esther George, president of the Federal Reserve Bank of Kansas City, will retire in January, the bank said in a press release Wednesday.
- George’s departure will leave a second vacancy at the helm of a regional Fed bank, as the Chicago Fed announced last month that its top official, Charles Evans, would also step down in early 2023.
- George is widely regarded as one of the most hawkish regional Fed presidents. She has recorded the highest percentage of dissenting votes at Federal Open Market Committee (FOMC) meetings, The Wall Street Journal reported, citing data from Wrightson ICAP.
Dive Insight:
George, a 40-year veteran of the Kansas City Fed, has led the institution since 2011. Her departure comes as she hits a mandatory retirement age of 65.
She would be the fourth regional Fed chief to signal she's leaving office since September, when financial disclosure forms revealed Boston Fed President Eric Rosengren and Dallas Fed President Robert Kaplan had traded stocks while also helping to set monetary policy in the run-up to the COVID-19 pandemic. The Federal Reserve has since issued new rules barring its board governors and 12 regional presidents from buying individual stocks, holding investments in individual bonds or agency-backed securities, or entering into derivatives — or from making transactions “during periods of heightened financial market stress.”
The spate of openings at the top of the Fed's regional outposts has also spurred lawmakers to call on the central bank to appoint more diverse leadership. The Boston Fed in February selected University of Michigan economist Susan Collins to become its next president, beginning July 1. She would become the first Black woman to lead a Fed regional bank.
The Dallas Fed, meanwhile, named Lorie Logan, a New York Fed executive vice president, to serve as its next leader, beginning Aug. 22. Her appointment generated blowback from Sen. Bob Menendez, D-NJ, and other lawmakers who wrote the central bank satellite urging its selection committee to choose a Latino to lead the bank.
The Kansas City Fed's board pledged Wednesday to find a diverse and qualified pool of candidates to replace George.
“Our challenge is to select a leader who can continue to build on the Bank’s outstanding reputation and provide a thoughtful, independent view on monetary policy,” María Griego-Raby, chair of the bank’s search committee, said in a press release. “Under Esther’s leadership, the Kansas City Fed has continued to deliver operational excellence across its mission areas of financial services and financial institution supervision, as well as maintain a strong commitment to public engagement."
George is one of 11 Fed regional presidents who hold rotating votes on the FOMC. Four of the regional presidents vote each year, along with the New York Fed president and the board of governors. The Kansas City Fed’s president has a vote on the committee this year.
The Kansas City Fed oversees monetary policy in the second-largest geographic area among the 12 regional Fed banks, in Colorado, Kansas, western Missouri, Nebraska, northern New Mexico, Oklahoma and Wyoming.
George's name surfaced earlier this year during Senate proceedings on the failed nomination of Sarah Bloom Raskin to serve as the Fed's vice chair of supervision.
Sen. Cynthia Lummis, R-WY, implied that Raskin used her standing as a former Fed governor to help the fintech Reserve Trust — where she served on the board of directors — gain a master account with the central bank after its first application was denied.
Raskin repeatedly refused at the hearing to say whether she called the Kansas City Fed on Reserve Trust’s behalf. She later submitted a written statement to Sen. Pat Toomey, R-PA, indicating she did “not recall any communications I made to help Reserve Trust obtain a master account.”
Toomey, the ranking member of the Senate Banking Committee, asserted in a letter after the hearing that George herself told him Raskin made the 2017 call directly to her.
