The Federal Reserve Bank of San Francisco said Friday it has elevated Mary C. Daly, its vice president and research director, to the top job, making the economist a key regulator and player on national monetary policy.
Daly, who has worked at the regional Fed bank for more than two decades, takes over for John C. Williams, who departed in June to become president of the powerful Federal Reserve Bank of New York.
She will be the first openly gay woman to lead a regional Federal Reserve bank.
Daly now becomes the top Fed official on the West Coast, with an important role in helping regulate large banks headquartered in California and eight other western states. Among them is San Francisco-based financial services giant Wells Fargo & Co.
As president and chief executive officer of the bank starting on Oct. 1, she will participate in the Fed’s monetary policy meetings in Washington and will immediately take a rotating voting seat on the rate-setting Federal Open Market Committee.
The Federal Reserve Bank of San Francisco announced today that its Board of Directors has appointed Mary C. Daly to the position of president and chief executive officer, effective October 1, 2018. Read more: https://t.co/6DLCWX4jHr | #sffedsearch pic.twitter.com/NW1fI81nKP— San Francisco Fed (@sffed) September 14, 2018
“In addition to her profound knowledge of economics and monetary policy, Mary is one of our nation’s leading authorities on labor-market dynamics,” said Alex Mehran, the San Francisco Fed’s chairman, who led the national search.
“Her research in this area reflects her deep commitment to understanding the impacts of monetary and fiscal policy on communities and businesses at a local, regional and national level,” he said.
The selection was made by a subset of the bank’s board of directors — those unaffiliated with regulated financial institutions — and approved by the Fed’s Board of Governors in Washington. The choice does not need Senate confirmation.
Daly took an unusual route to the Fed.
She dropped out of high school in Missouri amid family problems and then “worked at doughnut shops and … Target to try to cobble together a full-time salary,” she said in an interview for a podcast on Women in Economics by the Federal Reserve Bank of St. Louis. She went on to earn a GED and later a master’s degree and doctorate in economics.
Daly joined the San Francisco Fed in 1996 as a research economist. Since then, she has held several positions, most recently becoming vice president and research director in 2017.
Daly will be the third woman among the 12 regional Fed bank presidents and the second to head the San Francisco region.
The first was Janet L. Yellen, from 2004-10. She went on to become the first woman to head the Fed’s Board of Governors in Washington until stepping down in 2018 after President Trump decided not to renominate her for another four-year term as chairwoman.
Democratic lawmakers and liberal activists have complained in recent years about a lack of diversity among the Fed’s top leadership. They were not pleased when Williams was chosen for the New York Fed job and have advocated for the San Francisco Fed to conduct a search with diverse candidates.
Shawn Sebastian, field director of Fed Up, a campaign by labor, community and liberal activist groups that wants the Fed to enact pro-worker policies, released a statement Friday saying he was disappointed in the choice of Daly.
“By choosing their own research director (and longtime heir apparent to the position) as the new president, the San Francisco Fed proved again that the Fed is an insular institution that shuts out perspectives of outside voices, especially people of color,” he said. “The last three vacancies at Federal Reserve Banks have gone to three white candidates from within the Fed system or from the financial industry.”
Daly has written about her sexual orientation and has advocated for more diversity at the Fed — which she acknowledges has been difficult to achieve.
“As a gay woman working in a male-dominated profession, I’m acutely aware of the need for diversity and the importance of being included. And yet, I’ve made excuses,” she wrote in a post on the Medium website in 2016.
She led an effort at the San Francisco Fed to encourage more women to apply for research associate jobs, acknowledging that many applicants “thought of the Fed as a “boys club.”
The San Francisco Fed said it hired Diversified Search, the largest female-founded and owned firm in the search industry, to help develop “a pipeline of qualified candidates from a broad, diverse candidate pool.”
The bank’s search committee reached out to 4,000 stakeholders, and the search firm contacted 283 prospective candidates. A third were women and a third were minorities, the bank said.
Former USC Professor Raphael Bostic made history in 2017 when he was chosen as president of the Federal Reserve Bank of Atlanta, becoming the first African American to lead one of the Fed’s 12 regional banks. Bostic also become the first openly gay person to be a regional Fed president.