Hiring a New York Fed Chief Could Take A While

        By Kate Davidson
        Senate Banking Committee Chairman Richard Shelby (R., Ala.) wants to add one more name to the long list of financial agency nominees the Senate has the power to approve or reject: the president of the New York Federal Reserve.
        The proposal, included in a wide-ranging draft bill Mr. Shelby unveiled Tuesday, is just one of a handful of measures designed to enhance Congress's oversight of the central bank. The idea was first floated last year by Sen. Jack Reed, a Rhode Island Democrat, and is likely to garner bipartisan support from lawmakers who have criticized the New York Fed's supervision of Wall Street firms.
        The only problem: Neither the Senate nor the White House has a great track record of moving quickly to fill vacancies among financial regulatory agencies. That has meant some of the most powerful financial regulatory positions in recent years have been filled by temporary personnel, individuals whose terms have already expired, or not at all.
        A 2013 study by the Bipartisan Policy Center found that it has taken an average 240 days for presidents to decide on a nominee for an independent financial regulatory position. And it took an average of 137 days for the Senate to confirm them. Measured from the time of the vacancy--or the time the term expired--it has taken just over a year to fill those jobs.
        "The concept of having the New York Fed president be Senate-confirmable is a positive thing, but it's going to collide with the harsh realities that the confirmation process itself is fundamentally broken," said Isaac Boltansky, an analyst at Compass Point Research and Trading. "You needn't look farther than the already Senate-confirmable posts on the Fed board to see how difficult it is to find confirmable candidates in this political environment."
        There are currently two vacancies on the seven-member Fed board of governors. The 2010 Dodd-Frank financial overhaul law directed the president to nominate one of the governors to serve in a new role as vice chairman for supervision. Mr. Obama has not offered a name, so that position remains vacant after nearly five years.
        There are currently three other positions at financial regulatory agencies that are awaiting presidential nominations.
        President Barack Obama nominated banker Allan Landon in January to fill one of the Fed board slots. Mr. Shelby has said he won't schedule a hearing for Mr. Landon until the White House nominates a candidate for the other open Fed seat.
        "We'll see if they come up with two, and we'll see what we can do," Mr. Shelby said.
        Call it the Noah's Ark strategy. In recent years, financial nominees have had to move in pairs--one picked by the Democratic administration, and the other with the blessing of Republicans. Appeasing both sides has made it easier to overcome the procedural hurdles that have dogged the nomination process in the Senate.
        The Senate also changed the rules last year to make it easier to advance the president's nominees. Now that Republicans are in charge of the upper chamber, however, they control whether and when to schedule a vote.
        In the meantime, many agencies have had to operate in recent years at less-than-full strength, or with temporary leaders.
        In the event of a vacancy atop the New York Fed, the job would fall to the second-ranking officer--the first vice president--who is also an alternate voting member of the Fed's policy making Federal Open Market Committee. That position, like the job of president currently, is appointed by the bank's board of directors, subject to the approval of the Fed board of governors.
        Testifying before the Senate Banking Committee last year, New York Fed President William Dudley said he would not object to requiring Senate confirmation for his job. "It's completely up to Congress to decide how it works," he said.
        The provision would take effect as soon as the bill is enacted, but would only apply to future appointments. It would also require the New York Fed president to testify once a year before Congress.
        The outlook for the draft bill is murky. Senate Democrats are already lining up against it, complaining it is too broad. The fact this provision from a Democrat made it into the Republican proposal, however, underscores the measure's bipartisan appeal and could give it staying power.
        Related reading:
        Here's How the Shelby Draft Bill Would Affect the Fed
        Lawmaker Seeks More Oversight of New York Fed President
        It's Up To Congress How to Fill My Job, New York Fed Chief Tells Senator
        Community Bankers Push Lawmakers to Fill Vacant Fed Seat
        Who Is Allan Landon?
        (END) Dow Jones Newswires

        May 13, 2015 06:02 ET (10:02 GMT)

#FX
#Forex
#SaleForex
#AllanLandon
#NewYorkFedChief
#FedRates
#FedDecision