Feb 2006 Financial News

Ferguson leaves the Fed, depleting Bernanke's reserves

Feb 23, 2006

Roger Ferguson, the vice-chairman of the Federal Reserve and one of its most influential policymakers, is to step down after eight years at the US central bank.

Mr Ferguson's departure means that Ben Bernanke, the new Fed chairman, will be deprived of the services of one of the Fed's most respected officials on monetary policy and regulatory issues, who was known for his speeches on domestic and international policy and his advocacy of clearer communications on Fed policy.

Mr Ferguson was first appointed to the board by President Bill Clinton, in 1997, and was reappointed as a governor and vice-chairman by President George W. Bush in 2003. In spite of being a Democrat he was seen in Washington as a candidate to replace Alan Greenspan as Fed chairman.

He co-ordinated the Fed's efforts following the terrorist attacks in September 2001, at a time when Mr Greenspan was out of the country, and represented the Fed in a number of international policymaking groups, including chairing the Financial Stability Forum, which brings together national financial regulators.

Mr Bernanke, in a statement yesterday, said Mr Ferguson "led the Fed's first response to the 9/11 terrorist attacks, was a strong advocate for increased transparency of monetary policy, and ably represented the Federal Reserve in important international fora. I value his friendship and counsel greatly and wish him all the best in his new endeavours."

Mr Ferguson, who is 54 and holds a law degree and a PhD in economics from Harvard University, is understood to be exploring new professional opportunities and is likely to be inundated with offers, given his public and private sector experience. Before he joined the Fed, Mr Ferguson was a partner of McKinsey & Company, overseeing research and specialising in financial institutions, and worked as a corporate lawyer.

He will leave the central bank at the end of April and will not attend the next meeting of the policymaking Federal Open Market Committee at the end of March, the Fed said.

Mr Ferguson's departure creates another vacancy on the Fed's board. Randall Kroszner and Kevin Warsh, Mr Bush's nominees to fill existing vacancies, were approved by the Senate last week. Edward Gramlich, who was appointed to the Fed in 1997 along with Mr Ferguson, left the central bank last year.

Andrei Postelnicu in New York
Updated: 10:12 p.m. ET Feb. 22, 2006
http://www.msnbc.msn.com/id/11500078/
Thursday, 23rd February, 2006.