WASHINGTON _ The Federal Reserve's top official on the West Coast has been chosen to head its powerful New York regional bank, a controversial choice because he helped regulate Wells Fargo & Co. during its fake accounts scandal and is another white male at an institution critics complain sorely lacks diversity.
John Williams, an economist who has been president of the Federal Reserve Bank of San Francisco since 2011, was announced Tuesday as the next president of the Federal Reserve Bank of New York. The selection was made by the bank's board of directors and approved by the Fed's Board of Governors in Washington.
The choice does not need Senate confirmation. Williams will take over on June 18, succeeding retiring William Dudley, who announced last fall he would step down after holding the job since 2009.
"After a thorough process, my fellow search committee members and I felt that John best fulfilled the criteria we'd identified as well as the feedback we'd received through our public outreach efforts," said Sara Horowitz, founder of the Freelancers Union and chairwoman of the New York Fed's board.
The New York Fed presidency is the most influential among the 12 regional Fed banks. The New York Fed oversees some of the nation's largest financial institutions on Wall Street and its president serves as the vice chairman of the central bank's monetary policymaking committee.
Williams has worked at the Fed since earning his doctorate at Stanford University in 1994, taking a one-year leave of absence from 1999-2000 to serve as senior economist at the White House Council of Economic Advisors under President Clinton.
"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.
But the choice of Williams, which has been reported to be close, is not popular among some Democratic lawmakers and liberal activists.
The San Francisco Fed helps regulate Wells Fargo, and the bank's creation of millions of accounts without customer authorization took place under Williams' tenure. Former Wells Fargo Chief Executive John Stumpf, who retired in 2016 in the wake of the scandal, had served as the San Francisco Fed's representative on a Federal Reserve advisory committee.
"Mr. Williams' track record raises several questions, including about his fitness to supervise Wall Street banks given the San Francisco Fed's inadequate supervision of Wells Fargo during its many consumer scandals," Sen. Elizabeth Warren (D-Mass.) said last month in response to reports that Williams would get the job.
"If Mr. Williams is selected, the Fed's Board of Governors should not approve his selection until Mr. Williams and the co-chairs of the New York Fed's search committee testify before the Senate Banking Committee about his qualifications and the process that led to his selection," she said.
In February, Rep. Maxine Waters (D-Los Angeles) led a group of more than two dozen congressional Democrats who wrote to Fed Chairman Jerome H. Powell and the leaders of the New York Fed's search committee calling on them to consider diverse candidates for the job.
"The level of racial, ethnic gender, and occupational diversity among Reserve Bank presidents and directors has also historically been low throughout the Federal Reserve System," they wrote.
She and others have pushed the Fed to make more diverse choices and lauded the selection last year of USC professor Raphael Bostic as president of the Federal Reserve Bank of Atlanta, making him the first African American to lead one of the Fed's 12 regional banks.
Still, the lawmakers' Feb. 26 letter said that "presidents and directors at the Reserve Banks remain disproportionately male, white, and from corporate and financial backgrounds."
Shawn Sebastian, field director of Fed Up, a campaign by labor, community and liberal activist groups that wants the Fed to enact pro-worker policies, said the choice of Williams damaged the Fed's legitimacy and credibility.
"Today, the Federal Reserve concluded another opaque and controversial Reserve Bank presidential selection process by ignoring the demands of the public and choosing yet another white man whose record on Wall Street regulation and full employment raises serious questions," he said.
Horowitz and other leaders of the New York Fed's search committee had said they were committed to a wide-ranging search that stressed diversity, integrity and values. They said they hired two search firms, including one that focuses on diversity issues.
