The Presidents of the twelve Federal Reserve Banks are some of the most powerful unelected leaders in the U.S. government. Yet how they are chosen is largely unknown for two reasons. First, the boards of directors of the Reserve Banks that choose the Presidents are themselves a complicated group. And second, the process itself is long and mostly conducted behind closed doors. This interactive introduces you to the boards of directors and takes you step by step through the process they go through to choose the President.
There are 12 Federal Reserve Banks in the United States. Each is led by a President. This is the process by which the 12 Federal Reserve Bank Presidents are selected.
Like many corporations, choosing a President of the Federal Reserve is primarily the responsibility of the Board of Directors.
But who are the Federal Reserve's directors?
Two directors are chosen by small banks. Two directors are chosen by medium banks. Two directors are chosen by large banks. Three directors are chosen by the Board of Governors. Three represent all of the banks. Six represent the people.
Although this is the full nine member board of directors for the Federal Reserve, the Directors representing the banks are not allowed to participate in the selection process of the President. From the remaining six Directors representing the public, a search committee is formed.
The search committee often hires one or two external executive search firms.
All of this has brought us to the point where we have a group that will actually begin looking for the next Reserve Bank President. The group begins by sourcing a list of potential candidates, interviewing and narrowing down the list, and choosing one recommended candidate.
The search committee takes their recommended candidate back to the other directors that are eligible to participate in the President selection process. All six eligible directors then vote on the candidate. If they do not approve, the search committee goes back to work with the executive search firm until they find someone the six eligible directors of the Federal Reserve approve of.
After receiving support from the eligible directors, the final step for the candidate is to be approved by the Board of Governors in Washington, D.C. With approval from the Board of Governors, the candidate becomes the President of the Reserve Bank.
Interactive written and created by the Centralverse team. Copyright (C) 2021. All Rights Reserved. Any duplication of this interactive in part or entirety without written consent by Centralverse, Inc. is prohibited.
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