Who Will Replace Tim Geithner at NY Fed?

Possible New NY Fed Pres Kevin WarshAs the Economist said this week: “The New York Fed president is by tradition the financial system’s go-to crisis manager. Even in calm times the job places a premium on steady nerves, good judgment, stature, even temperament and an ability to learn quickly. That premium has been multiplied in the current environment.”

Which is why it’s so important that, when current NY Fed president Tim Geithner gets promoted to Treasury Secretary, there is a solid replacement. One very likely candidate is Fed Governor Kevin Warsh. He’s 38. Full bio below.

KEVIN WARSH BIO
Kevin M. Warsh took office on February 24, 2006, to fill an unexpired term ending January 31, 2018.

Prior to his appointment to the Board, Mr. Warsh served as Special Assistant to the President for Economic Policy and as Executive Secretary of the National Economic Council from 2002 until February 2006. His primary areas of responsibility included domestic finance, banking and securities regulatory policy, and consumer protection. He advised the President and senior administration officials on issues related to the U.S. economy, capital markets, securities, banking, and insurance issues. Mr. Warsh participated in the President’s Working Group on Financial Markets and served as the administration’s chief liaison to the independent financial regulatory agencies.

From 1995 to 2002, Mr. Warsh was a member of the Mergers & Acquisitions Department of Morgan Stanley & Co., in New York, serving as Vice President and Executive Director. He served as financial adviser to numerous companies across a range of industry sectors, including manufacturing, basic materials, professional services, and high tech. In that capacity, Mr. Warsh structured capital markets transactions and facilitated fixed income and equity financings.

Mr. Warsh was born in April 1970 in Albany, New York. He received an A.B. in public policy (honors) from Stanford University in 1992 with significant course work in economics and statistics. Mr. Warsh studied law, economics, and regulatory policy at Harvard Law School, receiving a J.D. (cum laude) in 1995. He also completed course work in market economics and debt capital markets at Harvard Business School and MIT’s Sloan School of Management.

The economist story also talks about two possible other candidates:

Another inside candidate might be William Dudley, who was chief economist for the United States at Goldman Sachs before Mr Geithner tapped him to become head of the New York Fed’s open-market desk in 2007 (and which now faces its toughest job in memory). The money markets, where the Fed operates on a daily basis, are the locus of the financial crisis; even the once-routine job of keeping the federal funds rate on its target has become a Herculean task. Mr Dudley has been a central figure, along with Brian Madigan of the board’s head of monetary affairs and Scott Alvarez, the general counsel, in the design of many of the Fed’s innovative liquidity programmes designed to thaw the credit freeze. He is not a familiar figure to the Wall Street chieftans with whom the New York Fed president interacts on a daily basis, but then neither was Mr Geithner when he got the job.

From outside the Fed, speculation will likely return to Peter Fisher, who had Mr Dudley’s job back in the 1990s before joining the Bush Treasury as under-secretary of domestic finance (though a Democrat). Mr Fisher was passed over for the job in 2003 and is now co-head of fixed income at BlackRock. Two other candidates from that era are Roger Ferguson, who was vice chairman of the Fed under Alan Greenspan, and Stanley Fischer, a former second-in-command at the IMF and top Citigroup official. But both have new jobs, Mr Ferguson as chief executive of TIAA-CREF and Mr Fischer as governor of the Bank of Israel. Lawrence Summers, the treasury secretary under Bill Clinton and a candidate for the job Mr Geithner appears to have been given, would be a logical candidate for the New York Fed presidency but appears likely to have some role in the Obama Administration. A dark horse candidate may be Dino Kos, who ran the New York markets desk before Mr Dudley. He is now at Portales Partners, a New York investment research firm. He is not a household name but impressed his colleagues when he was at the Fed.