Oct. 15 (Bloomberg) -- Timothy Geithner, director of policy development for the International Monetary Fund, was named president and chief executive of the New York Federal Reserve Bank, ending a search that began in January, according to the Fed bank. Geithner, 42, succeeds William McDonough, who retired in June after a decade as chief of the Fed's top regional bank to become chairman of the Public Company Accounting Oversight Board. ``I am honored to be selected for this post,'' Geithner said in a prepared statement.
Geithner brings experience in international negotiations to one of the most powerful jobs in finance and economics. The New York bank is the most important of the 12 regional banks in the Federal Reserve system because of its daily operations in financial markets and its direct relations with foreign central banks and Wall Street firms. ``He was always a calm and sober force at the center of the storm,'' said Ken Rogoff, the International Monetary Fund's former chief economist who now heads Harvard University's Center for International Development. ``I truly cannot think of a better choice as the new president.'' The New York Fed presidency has a permanent vote on the Federal Open Market Committee, which sets the level of interest rates. Other regional Fed bank presidents rotate as voters. Unlike three of the four Fed bank presidents now serving as voters, Geithner does not have a doctorate in economics. He has spent most of his career at the U.S. Treasury, which he joined in 1988 after having worked three years in the private sector for Kissinger Associates.
Peterson
His choice as president ends a search that stumbled when two top choices, Stanley Fischer, vice chairman of Citigroup, and Peter Fisher, Treasury undersecretary of domestic finance, withdrew in May, leaving the New York Fed with an interim leader for the past four months. ``I am pleased Tim will be at the helm; he'll do a great job,'' said Pete Peterson, chairman of the Blackstone Group, an investment bank, in a statement. Peterson headed the search committee that picked Geithner, who was also approved by the Federal Reserve Board of Governors. Geithner's appointment was first reported by BusinessWeek magazine in its online edition.
Summers
Before going to the IMF, Geithner was undersecretary for international affairs at the Treasury Department under then- Secretary Lawrence Summers. He played a major role in the Treasury's efforts to contain the Asian financial crisis in 1997 and 1998. A biography, furnished by the New York Fed, highlights his management responsibilities. He is director of the Policy Development and Review Department at the IMF, which has a staff of 180 people. Analysts said his experience with foreign finance ministers could be useful to the Fed, which is participating in discussions for new bank capital standards with other central bankers. ``The political side of this job is extremely important,'' said Lou Crandall, chief economist for Wrightson ICAP LLC in New York. ``Being president of the New York Fed is ultimately not about fine-tuning macroeconomic estimates.''
Basel Accord
As a Treasury official, Geithner participated in a number of international negotiations, including agreement on international banking standards known as the Basel accord, and an agreement that created the IMF's expanded emergency reserve fund. ``He's not a big drum banger. He tends to be soft-spoken and understated,'' said Michael Chamberlin, the president of the Emerging Markets Traders Association, which represents Bank of America, J.P. Morgan Chase & Co. and other issuers of debt from developing countries. ``Tim has always been somebody you could work with.'' Geithner received a bachelor's degree in government and Asian studies from Dartmouth College and a master's degree in economics and East Asian studies from Johns Hopkins University. He is married and has two children. Rogoff described him as a ``great tennis player.'' The New York Fed bank also serves as the Federal Reserve system's eyes and ears on world financial markets, and transacts almost daily in securities markets to adjust the level of bank reserves. Occasionally the Fed bank will intervene in the foreign exchange market on behalf of the Treasury. At the end of 2002, the New York Fed president collected $313,300 in salary, the second highest in the system behind San Francisco Fed President Robert Parry, who was paid $327,800. The salaries are adjusted on a cost-of-living basis. //www.bloomberg.com