People: New York Fed appoints new head of supervision

New York: The Federal Reserve Bank of New York announced on July 15 that Dianne Dobbeck will lead its supervision group, effective August 1.

Dobbeck is already a senior figure in the New York Fed’s supervision department, where she currently handles the supervisory policy and strategy portfolio. She holds a master’s from Princeton University’s school of public and international affairs.

The new supervision chief has worked at the New York Fed since 1997. She became a senior vice-president in 2009 and head of supervisory policy in 2013.

Dobbeck’s past leadership of the NY Fed supervisory team at JP Morgan coincided with the ‘London whale’ incident in 2012, when an outsized position placed by one trader led to $6 billion in losses.

The Federal Reserve’s inspector-general found that the NY Fed team could have liaised better with the other major federal regulators and failed to carry out a planned in-depth examination, partly due to lack of resources. Many of the problems identified predated Dobbeck’s tenure, and the report, which is heavily redacted, does not mention Dobbeck. It also appears the London whale trades took place before she took over supervision of the bank in 2012.

Around the same time, the US transitioned to a new supervisory framework, with major banks overseen via the Large Institution Supervision Coordinating Committee (LISCC). The Federal Reserve System has made further reforms to supervision in light of the inspector-general’s report.

A spokesperson for the New York Fed declined to comment.

“Dianne has been an exceptional leader in the many positions that she has held throughout her accomplished career at the bank,” said John Williams, president of the New York Fed.

As head of supervision, Dobbeck will serve on certain committees in this area under the Federal Reserve Board of Governors. These include the Supervision Committee and the LISCC.

Dobbeck succeeds Kevin Stiroh, who left the position in late January to head the Federal Reserve’s Supervision Climate Committee.

Atlanta: The Federal Reserve Bank of Atlanta announced on July 16 that it had hired Brian Watson as its chief strategy officer, with the rank of vice-president. Watson comes to Atlanta from the New York Fed, where he has worked since 2012. Since 2019, he has been a vice-president in New York’s strategic planning office.

In Atlanta, Watson will head up a new strategy office expected to be fully operational “later this summer”. This body will “advance the bank’s vision and direction and coordinate the strategic planning process”.

Watson holds a PhD in chemical engineering from the University of Delaware and did undergraduate work in chemistry at Penn State.

Washington, DC: US president Joe Biden nominated Graham Steele to be assistant secretary of the treasury for financial institutions, the White House announced on July 19. A lawyer by training, Graham currently runs the Corporations and Society Initiative at Stanford University’s Graduate School of Business.

Steele spent several years working in the US Senate. Between 2010 and 2015, he was an aide to senator Sherrod Brown of Ohio; from 2015 to 2017, he served as counsel for the Democrats on the Senate banking committee. Brown is now chair of the Senate banking committee.

Between his time in the Senate and Stanford, he worked at the Federal Reserve Bank of San Francisco.

The assistant secretary for financial institutions reports to the undersecretary of the treasury for domestic finance. That position is now occupied by Nellie Liang, whom the Senate confirmed on July 15.