Neel Kashkari, the administrator of the TARP bank bailouts under two administrations, will be the next president of the Federal Reserve Bank of Minneapolis, the bank announced Tuesday.
Kashkari, who joined the Treasury Department after a career at Goldman Sachs, was also a Republican gubernatorial candidate in California in 2014. Before running for office, he worked at the asset management firm Pimco.
He will replace current President Narayana Kocherlakota, who was scheduled to step down at the end of the year.
MayKao Hang, the incoming chair of the Minneapolis Fed’s board of directors who led the search for the new president, called Kashkari the “ideal candidate.”
“Mr. Kashkari stood out because of his inspiring leadership skills, solutions-oriented nature, collaborative style and deep commitment to public service,” she said.
For his part, Kashkari said in a statement through the Minneapolis Fed that he was “truly honored” to take on the role, noting specifically the importance of the bank’s research program. The Minneapolis Fed, known for its association with free-market economic research, was involved in a low-level controversy in 2013 under Kocherlakota when several top researchers abruptly were forced out.
Kashkari is not an economist. He has an MBA from the Wharton School and an MA from the University of Illinois, having previously worked in aerospace engineering before joining the financial sector.
He is the third consecutive Federal Reserve System president to be appointed without a PhD in economics and with a affiliation with Goldman Sachs, one of the largest banks in the world.
Before joining the Treasury, Kashkari was a vice president at Goldman Sachs in San Francisco. Robert Steven Kaplan, named as the head of the Dallas Fed in August, was previously a vice chairman of Goldman Sachs. Patrick Harker, chosen as head of the Philly Fed in March, was a trustee for the bank.
One other top-ranking Fed official, New York Fed president William Dudley, is also a Goldman Sachs alumni.
As president of the Minneapolis Fed, Kashkari will be responsible for regulating banks in his district, overseeing the bank’s research programs, and serving on the Fed’s monetary policy committee in Washington on a rotating basis.
He will be replacing the top “dove” on the monetary policy committee. In the past few years, Kocherlakota has issued several high-profile please for the central bank to ease monetary conditions and warned of the dangers of inflation falling too far beyond the Fed’s target.
Kashkari, by contrast, as yet has no reputation for his views on monetary policy.
Instead, his government experience comes administering the largest bailout in U.S. history. He joined the Treasury in 2008 as Assistant Secretary for International Economics and Development. As the financial crisis entered its worst days, however, he was tasked by Secretary Hank Paulson to oversee the Troubled Asset Relief Program, now known as TARP.
He continued in that role in the new Obama administration, before leaving the Treasury Department in May of 2009 to move to California.
Kashkari ran for governor as a fiscal conservative and social moderate, making jobs and education the focal points of his campaign. Despite spending a reported $3 million of his own money in the race, he lost by 20 points to Democrat Jerry Brown.
