N.Y. Fed Official Closing a History-Making Career

Article excerpt

Chester B. Feldberg never figured on spending 35 years at the Federal Reserve Bank of New York. Now, as he prepares to retire, the bank's top supervisor says he would never trade what his career has given him: a front-row seat on a dramatic evolution in financial services.

Mr. Feldberg has headed the New York Fed's examination force since being named executive vice president for bank supervision in January 1991. At yearend, he will pass the baton to a 25-year veteran, William L. Rutledge.

Chatting Thursday in his office in the New York Fed's headquarters building near Wall Street, Mr. Feldberg looked back on a tenure in which he has seen the banking industry rebound from deep loan losses and capital erosion. "We have seen the definition of banking grow and grow to include all kinds of financial-related activities," he said.

That growth, in turn, has forced a transformation in bank supervision. Over the past decade, he said, examiners have had to deemphasize reviews of transactions and focus on "what the key risks in an individual institution are. And I don't care which two institutions you want to compare -- those risks are going to be different."

By dint of position and personality, Mr. Feldberg has been one of the most influential policymakers in the Federal Reserve System. He oversees a supervision force of 600, including 400 examiners, serves on the Basel Committee on Banking Supervision, and knows the inner workings of some of the most complex and sophisticated U.S. and foreign financial institutions, many of which the New York Fed supervises. Yet Mr. Feldberg has determinedly remained behind the scenes, seldom speaking out in public or giving interviews.

"He's dynamic but very careful," said Richard M. Whiting, executive vice president of the Financial Services Roundtable. "He really fits into that image of what a central banker should be."

Mr. Feldberg can undoubtedly trace his bias for keeping a low profile to the 10 years he spent running the Fed's discount window in the 1970s and 1980s. The job required total discretion -- and reinforced Mr. Feldberg's conviction that life at the Fed could be a real adrenaline rush. He worked on the Lockheed and Chrysler loan guarantees, the New York City financial crisis, the Third World debt crisis, and the savings bank crises in New York and Ohio.

Though he had to extend credit in only one of those episodes, he relished the role he played on the big issues confronting the financial system. "For many of us, it is an addiction," he said.

He and Mr. Rutledge strive to convey that sense of excitement to their troops of examiners, who can be hard to retain beyond about three years. Turning to Mr. Rutledge, he said the best way to do that is to "turn them into crisis managers or junkies, like the rest of us," and got a hearty nod of assent. The two men, colleagues for more than a decade, exhibit a friendly respect for one another. "With 25 years at the bank, Bill's very well prepared for this supervision job," Mr. Feldberg said.

Mr. Rutledge, who had been a senior vice president for bank supervision since 1992, will be taking over just as an era begins. …