The Federal Reserve Bank of Richmond has selected Thomas Barkin, a top executive at McKinsey & Co., as its next president and chief executive, the bank said Monday.
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Mr. Barkin, 56 years old, succeeds Jeffrey Lacker, who stepped down from his post in April after admitting his involvement in the unauthorized disclosure of internal Fed information to an analyst in 2012.
Mr. Barkin has worked for McKinsey for about 30 years and is based in the firm's Atlanta office, where his clients include financial institutions and travel and transportation companies. He is currently the global consulting firm's chief risk officer and previously served as its finance chief.
From 2009 to 2014, he sat on the board of directors of the Atlanta Fed, serving as chairman in 2013 and 2014. He studied economics as an undergraduate at Harvard University and earned law and business school degrees there as well. Mr. Barkin will start his new job Jan. 1.
"Tom's exceptional academic credentials, his analytical and research-based thought leadership, combined with his understanding of the Federal Reserve System, were important considerations for this key leadership role," said Margaret Lewis, who chaired the Richmond Fed's search committee. Ms. Lewis also highlighted Mr. Baskin's experience leading information technology efforts at McKinsey. The Richmond Fed plays key roles in implementing and overseeing information technology for the Fed system.
The selection of Mr. Barkin, who is white, disappointed critics who have said the system lacks diverse leadership and have urged reserve bank directors to replace their retiring leaders with candidates who would better reflect the nation as a whole.
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In March, the Atlanta Fed named Raphael Bostic, an economist who has specialized in housing issues, as the first African-American president of a reserve bank in the 104-year history of the system. Two of the 12 Fed banks are led by women, and one is led by an American whose parents are from India.
The Richmond Fed had said it was looking to identify diverse candidates with strong backgrounds in economics, finance and information technology.
"They spent a whole year doing a search, and they came up with somebody who doesn't seem to meet their stated criteria or bring diversity," said Julia Coronado, founder of MacroPolicy Perspectives LLC, a New York economics advisory firm. "I don't know how long [the Fed] can keep talking about diversity as a priority and not deliver."
The criticism was echoed by Fed Up, an advocacy campaign that has pushed the Fed to make the selection process for bank presidents more transparent and to pick more diverse candidates. Before Mr. Bostic's appointment, the last three new bank presidents were men who had either worked for Goldman Sachs or served as trustees at Goldman.
Congressional Democrats led by California's Maxine Waters, the ranking member on the House Financial Services Committee, wrote twice this year to Fed Chairwoman Janet Yellen and to Ms. Lewis asking them to consider "minority, gender and occupational diversity" in its search for a new Richmond boss.
In a statement released by the Richmond Fed, Mr. Barkin said he plans "to be heavily engaged across the Fifth District to learn more about the challenges and opportunities facing our communities and bringing these perspectives forward as part of my monetary policy considerations and contributions."
Mr. Barkin's appointment breaks new ground in one way: He will be the first leader of the Richmond Fed who hasn't worked for the bank since the institution was founded in 1914.
The critiques of Mr. Barkin's selection illustrate how the search committee tasked with replacing retiring New York Fed President William Dudley will face scrutiny. Mr. Dudley has said he plans to leave the bank in the middle of 2018 once a successor is found.
"We make better decisions when we have diverse voices around the table," Fed governor Jerome Powell, who President Donald Trump has nominated to succeed Fed Chairwoman Janet Yellen, said at his Senate confirmation hearing last week. "It's about recruiting. It's about going out of your way to bring people in."
Some critics say the Fed banks face a collective action problem when it comes to appointing more diverse leadership because each bank primarily views its responsibility as picking the candidate it feels is the best fit for the institution ahead of improving the diversity of the overall system. "How do you make sure that those individual decisions add up to your objective of increasing diversity? There is nothing in the process to ensure that," said Ms. Coronado.
The heads of the Fed's 12 reserve banks are chosen by the nonbank directors of each institution. Finalists must also interview with and win approval from the Fed's Washington-based board of governors. The Richmond Fed began its search in January, when Mr. Lacker originally said he would retire this October.
Mr. Barkin isn't an academic and doesn't have a published body of work that indicates how he will weigh in on key monetary policy debates facing the Fed over inflation, labor markets and interest rates. He will serve as a voting member of the Fed's rate-setting committee next year.
Mr. Barkin has deep civic ties in the Atlanta area, where he has served on the executive committee of the Metro Atlanta Chamber of Commerce and the board of trustees at Emory University. In the last 15 years, he has made two donations to candidates for federal offices, both Democrats, according to the Center for Responsive Politics.
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(END) Dow Jones Newswires
December 04, 2017 12:13 ET (17:13 GMT)