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Former Fed governor to head S.F. branch

Janet Yellen, a former Federal Reserve governor who served as economic adviser to President Clinton, will take over as president of the San Francisco Fed, succeeding the retiring Robert Parry.
Dr. Janet Yellen Appointed President  CEO of the Federal Reserve Bank of San Francisco
Janet Yellen will take over June 14 as president and CEO of the Federal Reserve Bank of San Francisco BW
/ Source: Reuters

The Federal Reserve said Monday that one of its former policy-makers, Janet Yellen, has been appointed president of the San Francisco Federal Reserve Bank, replacing Robert Parry, who is retiring after 18 years.

Yellen, 57, a former governor of the central bank, will take up her position June 14. She is currently a professor of business and economics at the University of California at Berkeley, where she specializes in studies of unemployment, monetary policy and international trade.

The San Francisco Fed is the largest of the 12 regional Fed banks in terms of population and economic output, accounting for about 20 percent of U.S. economic activity.

Regional Fed presidents sit on the policy-setting Federal Open Market Committee and rotate as voting members.

San Francisco’s president votes every third year, with the next year being 2006.

Parry, who will reach the Fed’s mandatory retiring age of 65 in May, will not attend the next policy meeting May 4. He is the Fed’s second-longest-serving policy-maker, after Minneapolis Fed President Gary Stern.

Yellen was a chair of President Clinton’s Council of Economic Advisers from 1997 to 1999 and served as a Federal Reserve governor from 1994 to 1997. Prior to that, she was a professor at Berkeley, where she has been on the faculty since 1980. She has a Ph.D. in economics from Yale University.

It is unusual for a former Fed governor to return to the central bank as head of one of its regional banks. Long-time Fed watcher Tom Schlesinger of the Financial Markets Center said no other official has made that switch in recent decades.

San Francisco Fed Board chairman George Scalise said Yellen was picked “because of her extraordinary combination of monetary policy expertise, experience as a Federal Reserve Board governor in Washington, fiscal policy experience at the White House and her extensive academic, international trade, finance, and economic experience and research background.”

During her time at the central bank, Yellen was a consistent supporter of Fed Chairman Alan Greenspan — first in his efforts to head off inflation by raising interest rates, then to keep the economy purring by cutting them.

“Yellen has the technical mastery of monetary policy that is an advantage going into the position,” said Schlesinger. He also called her “a very talented macroeconomist who has spent a lot of her career looking into the causes and consequences and alleviation of unemployment.”

The change at the San Francisco Fed is part of an unusual amount of turnover at the central bank. New heads of the New York and Cleveland Fed branches were appointed last year, and  Richmond Fed President Alfred Broaddus is due to retire this year.