Tags: Dahlgren | Fed | bank | resign

Top Wall Street Bank Supervisor Dahlgren to Quit New York Fed

Thursday, 30 Apr 2015 03:57 PM

Sarah Dahlgren, one of the most influential Federal Reserve supervisors who oversees the largest U.S. banks, will resign from the New York Fed at the end of the year.

Dahlgren, 51, will step down on Oct. 1 and assume the role of senior adviser to New York Fed President William C. Dudley to help with the transition to her successor, the reserve bank said Thursday in a statement. A search for her replacement will begin immediately.

Dahlgren has a seat on a Fed unit that seeks to identify risks across the financial system, known as the Large Institution Supervision Coordinating Committee. Most of the banks and insurers in the LISCC portfolio are within Dahlgren’s New York Fed district. She became executive vice president in 2010 and head of the Financial Institution Supervision Group the following year.

Her challenges in recent years have included grappling with JPMorgan Chase & Co.’s more than $6 billion so-called London Whale trading loss and adapting the Fed’s supervisory teams to non-bank institutions like Prudential Financial Inc. and General Electric Capital Corp.

Dahlgren has also been one of the Fed’s spearheads on efforts to ensure that the incentives of boards and executives are aligned to manage risks inside the largest banks, one of the principal focuses of the Fed’s so-called stress tests, which are conducted yearly to ensure banks have enough capital to ride out an economic downturn.

In September 2008, she was put in charge of the New York Fed’s relationship with American International Group Inc., which was bailed out by the government that month in the midst of the financial crisis.

Crisis Lessons

“Sarah drew on the lessons of the financial crisis to implement significant reforms and innovations in how we supervise the largest institutions, including increased engagement with senior leadership, enhanced understanding of the firms’ businesses and broader cross-firm perspectives,” Dudley said in a statement.

Recently, the Fed has been on the defensive from lawmakers led by Democratic Senator Elizabeth Warren of Massachusetts, who say the regulator is too deferential to large banks. The Fed is considering measures to make it harder for its examiners to leave for banks they supervise to combat the perception of a “revolving door” between the regulatory community and Wall Street.

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Sarah Dahlgren, one of the most influential Federal Reserve supervisors who oversees the largest U.S. banks, will resign from the New York Fed at the end of the year.
Dahlgren, Fed, bank, resign
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2015-57-30
Thursday, 30 Apr 2015 03:57 PM
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