Bloomberg News

Obama Nominates Former Fed President Hoenig for FDIC Vice Chair

October 20, 2011

Oct. 20 (Bloomberg) -- U.S. President Barack Obama nominated Thomas Hoenig, the former Federal Reserve Bank of Kansas City president, to be vice chairman of the Federal Deposit Insurance Corp.

The nomination went to the U.S. Senate today, according to an e-mailed statement from the White House. That would almost complete an FDIC board that has been reduced to just three of five voting members because of departures and membership changes required by the Dodd-Frank Act.

Hoenig, 65, stepped down as president of the Kansas City Fed on Oct. 1 and would replace Martin J. Gruenberg as vice chairman. Gruenberg was nominated by Obama to be the agency’s chairman and is currently its acting leader. The Senate Banking Committee has approved the nominations of Gruenberg, Thomas J. Curry for comptroller of the currency and Richard Cordray to lead the Consumer Financial Protection Bureau. The full Senate hasn’t acted on any of the three nominations.

Hoenig, who was president of the Kansas City Fed for 20 years, repeatedly urged the Federal Open Market Committee to tighten monetary policy to prevent inflation from accelerating and asset-price bubbles from emerging.

As a voting member of the FOMC last year, Hoenig opposed the Fed’s pledge to keep rates “exceptionally low” for “an extended period,” the decision to reinvest proceeds from maturing mortgage-backed securities, and a $600 billion round of bond purchases. His eight straight dissents tied former Governor Henry Wallich’s record in 1980 for most in a single year.

--With assistance from Vivien Lou Chen in San Francisco and Scott Lanman in Washington. Editors: Dan Reichl, Michael Hytha.

To contact the reporter on this story: Phil Mattingly in Washington at pmattingly@bloomberg.net.

To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net


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