Dudley cuts New York Fed leadership term short, forcing search for perfect chief

New York Federal Reserve Bank President and CEO William Dudley will retire in mid-2018, before the end of his current term, putting the search for the next leader of the largest Reserve Bank by assets and activity volume into high gear.

Last week, current Fed  Gov. Jerome Powell was nominated by U.S. President Donald Trump as the central bank’s next chairman. Powell must be confirmed by the Senate before he will officially take the role from Janet Yellen in February 2018. The search for the next New York Federal Reserve Bank president will take a different process.

It is up to the eligible members of the New York Fed’s Board of Directors to find the next president. Eligible members are those without bank affiliations. Sarah Horowitz and Glenn Hutchins are serving as co-chairs of the search committee. Executive search firms Spencer Stuart and Bridge Partners have been retained to assist with the search, according to a release from the New York Fed.

The committee will identify a pool of candidates, and the Board of Governors of the Federal Reserve will have to approve the pick. Anyone interested in applying, or referring someone, can do so on the New York Federal Reserve Bank’s website.

The New York Fed plays a crucial role in U.S. monetary policy; the president always has a say in Federal Open Market Committee (FOMC) policy meetings. As vice chairman of the FOMC, the New York Fed president always votes at meetings whereas the other regional presidents have a rotating vote. In total, there are 12 regional Federal Reserve banks.

Dudley’s current term was scheduled to expire in January 2019, when he would reach the 10-year term limit for the role. According to a release from the New York Federal Reserve, his early announcement is to ensure a successor is in place “well before the end of his term.”

The search is expected to take six to nine months.