The Federal Reserve Bank of Minneapolis has named Neel Kashkari as its new president and CEO. Survivors of the 2008 financial crisis might remember Kashkari as the director of the US Treasury Department’s Troubled Asset Relief Program—TARP to wonks, the bank bailouts to everyone else. He’s replacing the dovish Narayana Kocherlakota, who announced his retirement in June.
Before Kashkari’s stint at Treasury, he was a vice president at Goldman Sachs. Afterward, he went on to burn more than half his net worth in a failed bid for California governor.
The Wall Street Journal has a great graphic showing that the appointment of a former banker to a Fed leadership post is something of a throwback. The decades after World War II saw the Fed recruiting more heavily from the world of academia (to which Kocherlakota is returning) and from within the Fed system than from the world of banking.
Kashkari was an aerospace engineer at TRW Corp. before he got into banking. He made the leap from the private sector to government along with former Goldman Sachs CEO Hank Paulson, who brought Kashkari along as an aide when he became Treasury secretary under US president George W. Bush. Kashkari left Treasury in 2009 and was a managing director at PIMCO until early 2013, when he left to focus on his political aspirations.
His term starts next year, though he won’t have a standing vote on Fed policy until 2017.