WASHINGTON (Reuters) -Boston Federal Reserve President Eric Rosengren announced on Monday that he will retire on Thursday, Sept. 30, citing a long-term health condition.
Rosengren revealed that he qualified for the kidney transplant list in June of 2020 and wanted to make “lifestyle changes” to protect his health, moving up his planned departure ahead of next June, when he reaches the mandatory retirement age of 65.
The Fed official was also facing public scrutiny, along with Dallas Fed Bank President Robert Kaplan, for stock trades last year that had raised questions about the effectiveness of Fed ethics rules.
A statement from the Boston Fed did not mention that controversy, but focused on Rosengren’s revelation to his staff that he had been put on the transplant list in June 2020, “upon the worsening of a kidney condition he has had for many years. Delaying the need for dialysis might be improved if he makes lifestyle changes now to lessen the risks of his condition.”
“It has become clear that I should aim to reduce my stress so that I can focus on my health issues,” Rosengren said in a letter Monday to Fed Chair Jerome Powell. “It is equally important for the Federal Reserve Bank of Boston and the Federal Reserve System to focus on what is important – to return the economy to full employment and carry out the important work conducted by the Boston Fed.”
Powell, in remarks included in the Boston Fed’s release, said Rosengren had brought “relentless focus” on the safety of the financial system to his work and had “distinguished himself time and again.”
It was his focus on financial stability, and particularly on possible risks in the commercial real estate market, that drew attention to investments he made during 2020 in real estate investment trusts. Both he and Kaplan, who made multiple million dollar trades in individual stocks in 2020, have faced public calls for their resignation for their actions undertaken at a time when millions of Americans lost their jobs and the Fed was taking historic steps to bolster financial markets and the economy.
Both Kaplan and Rosengren have said their ethics officers had signed off on their trading. Rosengren previously agreed to sell those investments by Sept. 30 amid criticism of the Fed’s ethics rules including from Powell, who has launched a broad review of Fed rules and agreed they needed reform.
When asked if he trusted the two regional Fed bank presidents to do their jobs, Powell said last week that “in terms of having confidence and that sort of thing, I think, no one is happy.”
Sept. 30 will now also be Rosengren’s last day in office. Boston Fed First Vice President Kenneth C. Montgomery will take over as interim president during the search for Rosengren’s replacement.
SEARCH FOR SUCCESSOR ‘WELL UNDERWAY’
Given Rosengren’s mandatory retirement next year that search is already “well underway” with a search committee including six of the Boston Fed’s board members, none of whom are bankers, the statement said.
Rosengren, a PhD economist, has been the president of the Boston Fed since 2007, and has been part of its staff since 1985. Prior to becoming president he was head of the bank’s supervision and regulation division.
As one of the Fed’s 12 regional bank presidents, Rosengren has a rotating seat on the central bank’s policy-setting committee and was slated to have a vote at next year’s meetings. Philadelphia Fed Bank President Patrick Harker is designated to vote as the alternate for the Boston Fed president, according to the Fed’s rules on its website.
During his tenure, Rosengren oversaw part of the central bank’s emergency response to stabilize financial markets during both the Great Recession and the coronavirus pandemic. That included facilities used to backstop money-market funds during both downturns and a new Main Street lending program to support loans to small and medium-sized businesses affected by the pandemic.
Rosengren spoke regularly about potential risks in financial markets, calling for greater reform of money-market funds and urging regulators to take a close look at stablecoins, a type of cryptocurrency that is pegged to a more traditional currency, such as the dollar.
He also participated in Fed events focused on the factors contributing to racial economic disparities.
“He will be sorely missed,” Corey Thomas, deputy chair of the Boston Fed’s board of directors, said in a statement released by the Boston Fed. “Eric worked tirelessly during the pandemic downturn to support the nation’s economic recovery, never revealing or complaining about a worsening health condition.”
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