S.F. Fed Bank Names President

Janet Yellen, a former Federal Reserve governor who served as President Clinton’s chief economist from 1997 to 1999, has been chosen as the new president of the Federal Reserve Bank of San Francisco, the Fed announced Monday.

Yellen, 57, currently a professor at UC Berkeley, will take over June 14 from Robert T. Parry, who is retiring after heading up the San Francisco regional Fed bank for the last 18 years.

Clinton selected Yellen to serve as the head of his Council of Economic Advisors after appointing her in 1994 to a term on the seven-member Fed board of governors.

Yellen will once again have a say in setting the Fed’s interest rate policies as a member of the Federal Open Market Committee, the panel of Fed governors and bank presidents that meets eight times a year.

Analysts said they did not expect much change in voting patterns from the positions taken by Parry during his time on the Fed. Yellen and Parry were viewed as officials who generally sided with Fed Chairman Alan Greenspan but would occasionally argue for more restraint in raising interest rates out of concerns about the effect on job growth.

The Fed bank presidents are chosen by the board of directors of each regional bank, but the selections must be approved by the Fed’s board of governors in Washington.

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

“She will fit in well. She is a highly respected economist and well known at the national level,” said David Wyss, chief economist at Standard & Poor’s in New York.

Greenspan said in a statement that he was pleased to welcome Yellen back to the Fed, saying she had “distinguished herself through consistently incisive analysis, impressive skills and unwavering integrity.”

Yellen received her doctorate in economics from Yale University.

Since 1980 she has been affiliated with the Haas School of Business at Berkeley, where she has often collaborated on research with another Berkeley professor, her husband, George Akerlof, who won the Nobel Prize in economics in 2001. She has specialized in studies of unemployment, monetary policy and international trade.

Yellen’s selection was announced by George M. Scalise, chairman of the San Francisco Fed’s board of directors, who said the choice was made after a nationwide search.

“Dr. Yellen rose to the top as our pick because of her extraordinary combination of monetary policy expertise,” Scalise said.

Yellen said she was looking forward to “meeting employees and community leaders throughout the highly diverse states that comprise the largest district in the Federal Reserve System.”

The San Francisco Fed region covers nine Western states, including Hawaii and Alaska. The San Francisco Fed is the largest of the 12 regional Fed banks in terms of population and economic output, accounting for about 20% of U.S. economic activity.